Finding Text
FINDING 2025-002 – MAINTENANCE OF EFFORT Significant Deficiency Federal Programs: Title I, Part A – Assistance Listing Number 84.010 Criteria 2 CFR part 200, Appendix XI, Compliance Supplement 2020, Section 4-84.000-13, states “An LEA may receive funds under an applicable program only if the SEA finds that the combined fiscal effort per student or the aggregate expenditures of the LEA from state and local funds for free public education for the preceding year was not less than 90 percent of the combined fiscal effort or aggregate expenditures for the second preceding year, unless specifically waved.” Condition The Indiana Department of Education completes the maintenance of effort calculation using the Form 9 report issued by the Organization, which is a cash-basis report. Review of the Organization’s Form 9 found the report to be unreliable for analysis of expenditures. The Form 9 reflected a total ending cash balance for all three schools of ($7,037,772), when the total cash balance held by the school at June 30, 2025 was $3,083,380. Cause and Effect The Organization did not report activity in line with the guidelines set by the Indiana Department of Education. Maintenance of effort calculations prepared by the Indiana Department of Education could be impacted by incorrect reporting of expense transactions. Recommendation We recommend the Organization develop internal controls to ensure expenses are properly reported on the Form 9 report in line with guidelines. Views of Responsible Officials and Planned Corrective Actions The Organization’s Corrective Action Plan is included on pages 37 to 38.