Finding Text
FINDING 2024-003
Subject: Special Education Cluster (IDEA) - Earmarking
Federal Agency: Department of Education
Federal Programs: Special Education Grants to States, Special Education Preschool Grants
Assistance Listings Numbers: 84.027, 84.173
Federal Award Numbers and Years (or Other Identifying Numbers): H027A190084 / 22611-037-PN01,
H027A200084 / 21611-037-PN01,
H173A210104 / 22619-037-PN01,
H173A220104 / 23619-037-PN01
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Matching, Level of Effort, Earmarking
Audit Findings: Material Weakness, Other Matters
INDIANA STATE BOARD OF ACCOUNTS 19
SCHOOL CITY OF MISHAWAKA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Condition and Context
An effective internal control system was not designed or implemented at the School Corporation to
ensure compliance with requirements related to the grant agreement and the Earmarking compliance
requirement.
The School Corporation is to ensure the same proportionate share amount of services is expended
for students with disabilities in nonpublic schools as they do for students with disabilities in the public school
system.
The School Corporation did not have adequate policies or procedures in place to ensure that
employees properly documented time worked split between public and non-public students. The School
Corporation maintained time and effort logs documenting all employees who worked exclusively on the
Special Education Program utilizing a semiannual certification. Employees who worked with both nonpublic
and public students were included on the semiannual certifications, but the School Corporation did
not maintain documentation supporting how much time was spent working specifically with nonpublic
students. Due to this, we were not able to determine if the School Corporation met the earmarking requirement
for the grants noted.
The lack of internal controls and noncompliance was isolated to employees that spent time working
with both public and nonpublic students within the grants noted above by identifying number.
Criteria
2 CFR 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 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 200.403 states in part:
"Except where otherwise authorized by statute, costs must meet the following general criteria
in order to be allowable under Federal awards: . . .
(g) Be adequately documented. . . ."
2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust
specific Federal award conditions as needed . . ."
511 IAC 7-34-7(b) states:
"The public agency, in providing special education and related services to students in nonpublic
schools must expend at least an amount that is the same proportion of the public agency total
subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities,
who are enrolled by their parents in nonpublic schools within its boundaries, is to the total
number of students with disabilities of the same age range."
INDIANA STATE BOARD OF ACCOUNTS
20
SCHOOL CITY OF MISHAWAKA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Cause
Through management inquiry, they were unaware of the requirements to track nonpublic proportionate
share expenditures directly for each employe based on actual time spent on nonpublic education.
Effect
The amounts requested for reimbursement were not supported by actual expenditures, but rather
by a percentage per employee. Therefore, we were not able to determine if the unit was in compliance with
the earmarking requirements. Noncompliance with the grant agreement and the compliance requirement
could result in the repayment of federal funds.
Questioned Costs
There were no questioned costs identified.
Recommendation
Management of the School Corporation should develop written policies and procedures which
would require tracking of actual nonpublic proportionate share expenditures by employee. Documentation
should be maintained to show how these expenditures are being tracked to ensure compliance with the
earmarking requirements.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.