Finding Text
FINDING 2023-007 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Annual Report Card/High School Graduation Rate 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): S010A200014, S010A210014, S010A220014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Annual Report Card/High School Graduation Rate Audit Findings: Material Weakness, Other Matters Repeat Findings This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-005. INDIANA STATE BOARD OF ACCOUNTS 31 SOUTH BEND COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation reports graduation rate data for all public high schools within the School Corporation using the four-year adjusted cohort rate. The School Corporation has a total of five high schools plus the juvenile detention center for which graduation rate data is submitted. To remove a student from the cohort, the School Corporation must confirm the reason for removal in writing. Additionally, required documentation for each removal type must be retained by the School Corporation. The Indiana Department of Education (IDOE) has outlined the acceptable documentation required when a student exists in a cohort. Once a student's required documentation is received, the School Corporation may then remove the student from the graduation cohort using the associated mobility code. Of the 27 students selected for testing, 10 students had documentation maintained by the School Corporation; however, it was not appropriate per the IDOE's student mobility documentation requirements. There were 9 students that had no documentation to support its mobility code. The lack of internal controls and noncompliance were systemic issues throughout 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). . . ." 20 USC 7801(23)(B) states: "To remove a student from a cohort, a school or local educational agency shall require documentation, or obtain documentation from the State educational agency, to confirm that the student has transferred out, emigrated to another country, or transferred to a prison or juvenile facility, or is deceased." Cause The School Corporation did not establish or implement an effective internal control system, including adequate segregation of duties, to ensure compliance with the grant agreement and the Special Tests and Provisions - Annual Report Card/High School Graduation Rate compliance requirement. Specifically, the School Corporation failed to maintain appropriate documentation supporting student cohort removals in accordance with the IDOE requirements. This deficiency resulted from a lack of oversight, insufficient staff training on documentation standards, and the absence of formal review procedures to verify the accuracy and completeness of graduation rate data submitted. INDIANA STATE BOARD OF ACCOUNTS 32 SOUTH BEND COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Due to the lack of effective internal controls and noncompliance with the IDOE documentation requirements, the School Corporation submitted inaccurate graduation rate data for the audit period. Specifically, the improper or missing documentation for student cohort removals undermines the reliability of reported graduation rates. This misrepresentation of school performance can affect accountability determinations and jeopardize continued eligibility for federal funding tied to compliance with grant and reporting requirements. Questioned Costs There were no questioned costs identified. Recommendation The School Corporation should design and implement an internal control system to ensure compliance with the IDOE documentation requirements for graduation rate reporting. This includes establishing clear procedures for verifying and retaining acceptable student mobility documentation, assigning oversight responsibilities to ensure proper review of documentation and procedures, and providing staff with necessary support and resources over documentation standards. Periodic reviews and monitoring should be instituted to ensure compliance and improve documentation retention. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.