Finding Text
Information on the federal program:
Subject: Education Stabilization Fund (ESSER) – Internal Controls
Federal Agency: Department of Education
Federal Program: COVID-19 – Education Stabilization Fund
Assistance Listing Number: 84.425D, 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U200013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
Audit Finding: Material Weakness
Criteria: 2 CFR section 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). . . ."
2 CFR 200.302(b) states in part:
"The financial management system of each non-Federal entity must provide for the following:
(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in
accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ."
34 CFR 76.722 states:
"A State may require a subgrantee to submit reports in a manner and format that assists the State in
complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the
program."
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 Reporting compliance
requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with the compliance requirements listed above.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified.
Context: The School Corporation was required to submit two Annual Data Reports to the Indiana
Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER
grant awards. We noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($397,392
and $294,138, respectively) did not agree to the underlying expenditure records ($498,259 and $1,509,413,
respectively, for the period of July 1, 2021 through June 30, 2022).
Additionally, we noted that the ESSER II and ESSER III amounts reported on the Year 4 report ($400,501
and $294,129, respectively) did not agree to the underlying expenditure records ($412,324 and $287,065,
respectively, for the period of July 1, 2022 through June 30, 2023).
We noted that the 602 number of Full-time equivalent (FTE) positions on September 30, 2022 on the first
report did not agree to the underlying records supporting number of 1,233 Full-time equivalent (FTE)
positions on September 30, 2023.
Identification as a repeat finding: No.
Recommendation: We recommend someone other than the preparer of the report perform a documented
review prior to submission to validate the accuracy and completeness of the data submitted.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.