Finding 1179523 (2025-001)

FINDING 2025-001 Subject: Twenty-First Century Community Learning Centers - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Twenty-First Century Community Learning Centers Assistance Listings Number: 84.287 Federal Award Numbers and Years (or Other Identifying Numbers): S287C220014, S287C230014, S287C240014 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The Twenty-First Century Community Learning Centers grant is awarded to schools to provide opportunities for academic enrichment for children, particularly students who attend a high-poverty and lowperforming school. The program is intended to help students meet state and local academic achievement standards in core academic subjects, such as reading and math; to offer students a broad array of enrichment activities that reinforce and complement their regular academic programs; and to offer literacy and other educational services to the families of participating children. Program funds are intended to be used for activities that provide students with activities that complement the regular school-day program of participating students and also fund local activities that are included as part of an expanded learning time (ELT) program that provides students at least 300 additional program hours before, during or after the traditional school day. A sample of 41 vouchers reimbursed by the Indiana Department of Education from the School Corporation's grant funds were selected for testing, consisting of 17 vendor claims and 24 payroll claims. Of the 17 vendor claims selected, 2 were for activities and costs that were determined to be unallowable. The first voucher was paid to NLB Sportswear to purchase 85 Sport-Tek Stripe Pom Pom Beanies in the amount of $1,190. The second voucher was paid to Shoup's Country Foods for a Staff Christmas Dinner in the amount of $1,504. We found 3 additional payments made to Shoup's Country Foods from grant funds during the audit period totaling an additional $3,209, 1 for a December 2024 Christmas dinner and 2 for a December 2023 Christmas dinner. The total amount of charges for these expenditures was $5,903, which we considered to be questioned costs. Internal controls over grant expenditures were not properly designed and implemented to detect and prevent the noncompliance noted above. Criteria 2 CFR 200.303 states in part: "The recipient and subrecipient must: INDIANA STATE BOARD OF ACCOUNTS 14 CLINTON CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federallyfinanced and other activities of the non-Federal entity. . . ." Cause The grant manager approved the expenses and directed that they be paid from this funding. The Treasurer, who reviewed all expenses, did not consider it appropriate to question the expenses because the grant manager had already approved them. Effect Without proper implementation of an effectively designed system of internal controls, the School Corporation made purchases for unallowable items. Examiners were unable to determine how these items benefited the program. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs Questioned costs in the amount of $5,903 were identified as described in the Condition and Context. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including documented policies and procedures, that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are obtained to support disbursements that are charged to the respective grants. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.