Finding Text
FINDING 2025-004 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): FY2024, FY2025 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Other Matters Condition and Context Eligibility for Title I is determined on the Eligible School Summary of the Title I application. Enrollment and poverty numbers are automatically pulled from the Indiana Department of Education's (IDOE) Official Pupil Enrollment (PE) count for each school into the Eligible School Summary page of the Title I application. These counts that are prepopulated should be based on the School Corporation's records as of October of the prior fiscal year. There was no audit evidence that the School Corporation performed a review of the enrollment and poverty counts that were prepopulated into the School Corporation's Title I grant application. During the audit period, the School Corporation submitted two Title I applications. The School Corporation was required to use the October 2022 Real Time Report data for the 2023-2024 Title I application, and the October 2023 Real Time Report data for the 2024-2025 Title I application submitted to the IDOE. Data to be submitted included student socioeconomic status information. The school lunch software was used to verify the socioeconomic status of students reported in the Title I application. A total of 25 students were selected for testing. The socioeconomic status for 1 of the 25 students tested from the October 2022 Real Time Report data did not agree to data reported in the 2023-2024 Title I application. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the October 2022 Real Time Report and the 2023-2024 Title I application. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 20 MITCHELL COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 staff 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 to retain and provide appropriate supporting documentation for the Real Time Reports and 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 We recommended that the School Corporation's management establish a system of internal controls to ensure Real Time Reports are reviewed for accuracy and compared to the Title I application and that adequate documentation is maintained to support the information in the Title I application. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.