Finding Text
FINDING 2024-006
Subject: COVID-19 - Education Stabilization Fund - Reporting
Federal Agency: Indiana Department of Education
Federal Program: COVID-19 - Education Stabilization Fund
Assistance Listings Numbers: 84.425D, 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
Audit Findings: Material Weakness, Modified Opinion
Repeat Finding
This is a repeat finding from the immediately prior audit report. The prior audit finding number was
2022-010.
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 Reporting compliance
requirement. Even though the reports were reviewed by someone other than the preparer, the School
Corporation was not able to provide financial information that was used to determine amounts used in the
reports.
The School Corporation completed and submitted four annual Data Collection reports (Reports) for
the Elementary and Secondary School Emergency Relief (ESSER) grants. For all four of the Reports, the
School Corporation was unable to provide financial information to support the amounts in the Reports;
therefore, the Indiana State Board of Accounts could not determine the accuracy of the Reports.
Additionally, eight of eight key line items selected for testing could not be verified to the financial records.
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 200.302(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. . . ."
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."
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. . . ."
34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with
program requirements."
Cause
According to the School Corporation, these issues were due to the reporting differences of how the
annual expenditure report categories are different than the annual Data Collection reports. The School
Corporation indicated that it had to go employee by employee to properly place them under the correct
category using the reimbursement requests but did not retain that documentation of how it came to the
numbers.
Effect
The failure to design and implement an effective internal control system enabled noncompliance to
go undetected with the Reporting compliance requirement.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that the School Corporation's management establish effective internal controls
to ensure reports submitted are accurate and have supporting documentation.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.