FINDING 2024-003
Subject: COVID-19 - Education Stabilization Fund - Reporting
Federal Agency: Indiana Department of Education
Federal Program: COVID-19 - Education Stablization Fund
Assistance Listings Numbers: 84.425C, 84.425D, 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013,
S425D210013, S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
Audit Findings: Material Weakness, Modified Opinion
Condition and Context
The School Corporation was required to submit annual data reports to the Indiana Department of
Education (IDOE) via JotForm, a form/report builder. Data to be submitted included, but was not limited to,
current period expenditures, prior period expenditures, and expenditures per activity.
During the audit period, the School Corporation submitted one ESSER I report, two ESSER II
reports, and two ESSER III reports for a total of five reports. The annual data reports were compiled,
prepared, and submitted by the Treasurer without an oversight or review process in place to prevent, or
detect and correct, errors.
In addition, the five annual data reports were not supported by the School Corporation's records.
The documentation used to prepare the reports was not retained by the School Corporation and the ledger
activity for the time period of each report did not agree to the data submitted. As such, the Indiana State
Board of Accounts could not verify the information submitted to the IDOE was accurate or complete.
The lack of internal controls 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 200.334 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 the Federal awards that are renewed
quarterly or annual, from the date of 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 200.302(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
and 200.329. . . ."
(3) Records that identify adequately the source and application of funds for federally
funded activities. These records must contain information pertaining to Federal
awards, authorizations, obligations, unobligated balances, assets, expenditures,
income and interest and be supported by source documentation. . . ."
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."
34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with
program requirements."
Cause
A proper system of internal controls, which include segregation of key functions, was not
established by management of the School Corporation to ensure that reports filed were supported by
School Corporation records and had an independent review, for accuracy and completeness, prior to
submission.
Effect
Without a proper system of internal controls in place that operated effectively, the School
Corporation submitted reports that were not supported by School Corporation records. Noncompliance
with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could
result in the loss of future federal funds to the School Corporation.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that management of the School Corporation establish a proper system of
internal controls and develop policies and procedures to ensure that documentation utilized in the
preparation of the reports is maintained and that there is an independent review of the reports for accuracy
and completeness prior to submission.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.