Finding Text
FINDING 2024-004
Subject: Special Education Cluster (IDEA) - Suspension and Debarment
Federal Agency: Department of Education
Federal Program: Special Education Grants to States
Assistance Listings Number: 84.027
Federal Award Numbers and Years (or Other Identifying Numbers): 22611-046-PN01, 23611-046-PN01
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Procurement and Suspension and Debarment
Audit Findings: Material Weakness, Other Matters
INDIANA STATE BOARD OF ACCOUNTS
21
METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Condition and Context
The School Corporation is a member of the Porter County Education Interlocal (Cooperative).
During fiscal year 2022-2023, the Cooperative operated the special education programs and spent the
federal money on behalf of all its members. As the grant agreements were between the Indiana Department
of Education and each member school, the School Corporation was responsible for ensuring and providing
oversight of the Cooperative. However, there was inadequate oversight performed by the School
Corporation in order to ensure compliance with the Procurement and Suspension and the Debarment
compliance requirement.
The School Corporation did not have internal controls in place to ensure that the Cooperative
complied with the suspension and debarment requirements. The Cooperative did not have effective internal
controls to ensure compliance with the suspension and debarment requirements.
Prior to entering into covered transactions with grant award funds, entities are required to verify
that vendors under covered transactions are not suspended, debarred, or otherwise excluded. "Covered
transactions" include, but are not limited to, contracts for goods or services awarded under procurement
and nonprocurement transactions (i.e., grant agreement) that are expected to equal or exceed $25,000.
The verification is to be done by checking the System for Award Management (SAM) exclusions, collecting
a certification from that person, or adding a clause or condition to the covered transaction with that person.
Upon inquiry of the Cooperative in order to review procedures in place for verifying that an entity
with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded,
the Cooperative explained that if the covered transaction had a contract, the contract was verified to make
sure the clause for suspension and debarment was included. However, if the covered transaction did not
involve a contract, the Cooperative did not have procedures in place to verify the suspension and
debarment requirements. A population of five covered transactions for goods or services that equaled or
exceeded $25,000 paid from grant award funds during the audit period was identified. Three of the five
covered transactions did not have documentation to show that they were verified for the suspension and
debarment requirements.
The lack of internal controls and noncompliance were 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). . . ."
2 CFR 180.300 states:
"When you enter into a covered transaction with another person at the next lower tier, you must
verify that the person with whom you intend to do business is not excluded or disqualified. You
do this by:
INDIANA STATE BOARD OF ACCOUNTS
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METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
(a) Checking the SAM.gov Exclusions, or
(b) Collecting a certification from that person, or
(c) Adding a clause or condition to the covered transaction with that person."
Cause
The Cooperative indicated that if the covered transaction had a contract, the contract was verified
to make sure the clause for suspension and debarment was included. However, if the covered transaction
did not involve a contract, the Cooperative did not have procedures in place to verify the suspension and
debarment requirements.
Effect
Without the proper implementation of an effectively designed system of internal controls, the
internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified
to be suspended, debarred, or otherwise excluded.
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 funding 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 vendors are not suspended, debarred, or
otherwise excluded prior to entering into any covered transactions.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.