Finding Text
FINDING 2024-007
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): S425D210013, S425U200013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
Audit Finding: Material Weakness
Condition and Context
An effective internal control system, which would include segregation of duties, was not in place at
the School Corporation in order to ensure reporting was accurate for disbursements from the education
stabilization fund.
INDIANA STATE BOARD OF ACCOUNTS
27
LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
The School Corporation did not implement or maintain supporting documentation of the reviews or
approval by a knowledgeable person to ensure reporting was accurate for disbursements from the
COVID-19 - Education Stabilization Fund grant.
The lack of effective internal controls was a systematic issue during 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). . . ."
Cause
A proper system of internal controls was not designed by management of the School Corporation,
which would include appropriate segregation of duties. Embedded within a properly designed and
implemented internal control system should be internal controls consisting of policies and procedures. The
School Corporation has policies to establish internal controls and procedures but did not establish proper
internal controls.
Effect
The failure to establish an effective internal control system enabled material noncompliance to go
undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could
have resulted in the loss of federal funds 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 compliance with reporting requirements.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.