Finding Text
FINDING 2022-004Subject: Special Education Cluster (IDEA) - Suspension and DebarmentFederal Agency: Department of EducationFederal Program: Special Education Grants to StatesAssistance Listings Number: 84.027Federal Award Numbers and Years (or Other Identifying Numbers): 20611-115-PN01, 21611-115-PN01,22611-115-PN01Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Procurement and Suspension and DebarmentAudit Findings: Material Weakness; Other MattersRepeat FindingThis is a repeat finding from the immediately prior audit report. The prior audit finding number was2020-002.Condition and ContextAn effective internal control system was not in place at the School Corporation to ensure compliancewith requirements related to the grant agreement and the suspension and debarment requirementsof the Procurement and Suspension and Debarment compliance requirement.The School Corporation did not follow procedures established by the grant agreement to ensurethat applicable vendors who received federal funds were not suspended or debarred from participation infederal awards programs. The School Corporation entered into a contract that exceeded $25,000 forpsychological services. The School Corporation did not perform procedures to ensure that the vendor wasnot suspended or debarred from participation in federal programs.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 180.300 states:"When you enter into a covered transaction with another person at the next lower tier, you mustverify that the person with whom you intend to do business is not excluded or disqualified. Youdo this by:(a) Checking SAM Exclusions; or(b) Collecting a certification from that person; or(c) Adding a clause or condition to the covered transaction with that person."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the grant agreement and the suspension and debarment requirements of the Procurement andSuspension and Debarment compliance requirement.EffectThe failure to establish an effective internal control system enabled material noncompliance to goundetected. Noncompliance with the grant agreement and the suspension and debarment requirementsof the Procurement and Suspension and Debarment compliance requirement could result in the loss offuture federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish an internal control systemto ensure compliance and comply with the grant agreement and the Procurement and Suspension andDebarment compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.