Finding Text
FINDING 2024-004
Subject: Special Education Cluster (IDEA) - Period of Performance
Federal Agency: Department of Education
Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States,
Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants
Assistance Listings Numbers: 84.027, 84.173
Federal Award Numbers and Years (or Other Identifying Numbers): 22611-047-PN01, 22611-047-ARP,
22619-047-PN01, 22619-047-ARP
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Period of Performance
Audit Findings: Material Weakness, Other Matters
Condition and Context
During fiscal year 2023-2024, the School Corporation was a member of the Cooperative School
Services (Cooperative). The Cooperative operated the special education programs and spent the federal
money on behalf of its member schools. As the grant agreement was between the Indiana Department of
Education and each member school, the School Corporation was responsible for ensuring and providing
oversight of the Cooperative.
For Special Education Cluster awards, funds must be obligated during the 27 months, extending
from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second
following fiscal year.
When testing transactions which occurred in the liquidation period for the 22611-047-PN01,
22611-047-ARP, 22619-047-PN01, and 22619-047-ARP grant awards, two exceptions were identified in
the initial sample of 5 transactions. When expanding the sample, a third exception was noted, and it was
concluded that it would not be appropriate to examine the remaining 14 transactions.
For the above listed awards, costs must be obligated by September 30, 2023. For the three
identified exceptions, an initial purchase order was made in September, but the ultimate transaction was
paid to a separate vendor than the original purchase order, and this obligation was incurred in November
2023.
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 200.1 states in part: ". . . Period of performance means the total estimated time interval
between the start of an initial Federal award and the planned end date . . ."
34 CFR 76.709(a) states: "If a State or a subgrantee does not obligate all of its grant or subgrantee
funds by the end of the fiscal year for which Congress appropriated the funds, it may obligate the remaining
funds during a carryover period of one additional fiscal year."
34 CFR 76.707 states in part:
". . . If the obligation is for– . . .
(a) Acquisition of real or personal property. . . .
The obligation is made–
On the date on which the State or subgrantee makes a binding written commitment to
acquire the property. . . ."
Cause
Management had established an initial obligation date that occurred in September of the second
fiscal year but modified the final vendor for payment. The new obligation occurred after the period in which
the School Corporation was allowed to incur the expense.
Effect
If funds are not obligated by the end of the specified date, the grantor agency is not obligated to
reimburse the School Corporation for costs incurred. This may indicate that the funding reimbursed that
was incurred outside of the period of performance will need to be repaid to the grantor agency, and the
School Corporation will then need to support the costs with nonfederal funding.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that the School Corporation's management establish a system of internal
controls to ensure that no costs are incurred after the September 30 deadline and to ensure compliance
with the grant agreement and the Period of Performance compliance requirement.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.