Finding Text
FINDING 2024-006
Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment
Federal Agency: Department of Education
Federal Programs: Special Education Grants to States, Special Education Preschool Grants, COVID-19 -
Special Education Grants to States, COVID-19 - Special Education Preschool Grants
Assistance Listings Numbers: 84.027, 84.173
Federal Award Numbers and Years (or Other Identifying Numbers): HO27A220084, 21611-127-PN01,
22611-127-ARP, 22611-127-PN01,
23611-127-PN01, 23619-127-ARP,
22619-127-PN01, 23619-127-PN01
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Procurement and Suspension and Debarment
Audit Finding: Significant Deficiency
Condition and Context
An effective internal control system was not in place at the School Corporation to ensure
compliance with requirements related to the grant agreement and suspension and debarment compliance
requirements.
INDIANA STATE BOARD OF ACCOUNTS
25
MADISON CONSOLIDATED SCHOOLS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Prior to entering into subawards and covered transactions with the Special Education Cluster
(SPED) award funds, recipients are required to verify that such contractors and subrecipients are not
suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to,
contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that
are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties
List System, collecting a certification from that person, or adding a clause or condition to the covered
transactions with that person. There was no internal control in place, such as an oversight, review, or
approval process, to ensure that contractors or subrecipients were not suspended, debarred, or otherwise
excluded.
The lack of internal controls was a systemic issue 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). . . ."
Cause
The School Corporation did not have internal controls in pace to ensure the suspension and
debarment status for covered transactions it intended to pay with federal funds of the major program were
properly verified.
Effect
Without the proper design or implementation of internal controls, the internal control system cannot
be capable of effectively preventing, or detecting and correcting, material noncompliance. This could result
in the School Corporation paying a contractor who has been suspended or debarred, which would be
unallowable.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that management of the School Corporation strengthen its system of internal
controls to ensure that suspension and debarment is verified for all covered transactions of $25,000 or
more.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report