Finding Text
FINDING 2024-013 Subject: Title I Grants to Local Educational Agencies - Eligibility Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A210014, S010A220014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility 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 2022-013. Condition and Context The School Corporation submits the October Real Time report each year to the Indiana Department of Education (IDOE). This data is used to report the School Corporation's enrollment and poverty (socioeconomic) status of the students enrolled in each school. The School Corporation had not properly designed or implemented a system of internal controls to ensure a proper review and approval of the October Real Time report took place before submission to the IDOE. Enrollment and poverty numbers for any nonpublic schools are manually entered into the Title I Application by the School. Summary data of nonpublic enrollment and poverty status was provided to the School Corporation by the participating nonpublic school. The enrollment counts and the poverty counts included in the summary data should have been supported by nonpublic school records, such as a list of students and their poverty status. The School Corporation did not retain the supporting documentation for the audit period for the nonpublic schools. The lack of internal controls and lack of supporting documentation was systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 45 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 200.334 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 200.78(a)(1) states: "After reserving funds, as applicable, under § 200.77, including funds for equitable services for private school students, their teachers, and their families, an LEA must allocate funds under this subpart to school attendance areas and schools, identified as eligible and selected to participate under section 1113(a) or (b) of the ESEA, in rank order on the basis of the total number of public school children from low-income families in each area or school." Cause Due to turnover of staffing in the School Corporation's administrative office, the School Corporation's management had not established a system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, related to the Eligibility compliance requirement. Effect The School Corporation did not establish an effective system of internal controls and retain and provide appropriate supporting documentation for the audit period which enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Eligibility compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation 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, real time reports and nonpublic school enrollment documentation were not maintained for audit, and, as such, the Indiana State Board of Accounts could not determine if the School Corporation complied with the Eligibility compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 46 NORTH LAWRENCE COMMUNITY SCHOOLS 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.