FINDING 2024-003
Subject: COVID-19 - Education Stabilization Fund - Reporting
Federal Agency: 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): S425D200013, S425D210013,
S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
Audit Findings: Material Weakness, Other Matters
Condition and Context
As part of sound management of the federal award, the School Corporation was responsible for
implementing a system of internal controls that would ensure compliance with the applicable requirements.
The School Corporation had not properly designed or implemented such a system, which would include
appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting,
noncompliance.
The School Corporation was required to submit annual data reports to the Indiana Department of
Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current
period expenditures, prior period expenditures, and key line items such as "Number of Specific Positions
Supported with ESSER Funds," "Allocation of ESSER funds . . .," "LEA expenditures by ESSER Subgrant
fund . . .," and "Full-Time Equivalency Positions."
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. There was no evidence of an oversight, review,
or approval process to prevent, or detect and correct, errors prior to submission.
All five reports were selected for testing. Three of the reports were not supported by the School
Corporation's records. The following errors were identified:
The ESSER II, Year 2 and Year 3 reports, which covered the periods of July 1, 2021 to
June 30, 2022, and July 1, 2022 to June 30, 2023, respectively, Key Line Items were not
able to be traced to supporting documentation. For both reports, Personnel Services -
Salaries could not be traced to the School Corporation's records. For the ESSER II, Year
3 report, Supplies could not be traced to the School Corporation's records.
The ESSER III, Year 3 report, which covered the period of July 1, 2022 to June 30, 2023,
Key Line Items were not able to be traced to supporting documentation. The School
Corporation reported amounts related to Personnel Services - Salaries and Supplies that
were not supported by the School Corporation's records.
The lack of internal controls and noncompliance were systemic issues throughout the audit period.
INDIANA STATE BOARD OF ACCOUNTS
21
SOUTH HARRISON COMMUNITY SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
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. . . ."
34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with
program requirements."
Cause
Due to problems encountered during the uploading process in JotForm, the School Corporation
was unaware that information submitted was incorrect after multiple attempts at uploading at the Indiana
Department of Education's request. Additionally, the School Corporation's management had not developed
a system of internal controls to ensure that reports required for COVID-19 - Education Stabilization Funds
were accurate, supported by the School Corporation's records, and reviewed prior to submission.
Effect
Due to a lack of review and segregation of duties, the School Corporation submitted ESSER II and
ESSER III reports that were not supported by the School Corporation's records. As a result, material
noncompliance occurred and remained undetected.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that the School Corporation's management establish a proper system of internal
controls and strengthen its policies and procedures to ensure all reports submitted are accurate.
INDIANA STATE BOARD OF ACCOUNTS
22
SOUTH HARRISON COMMUNITY SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.