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FINDING 2025-006 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): S010A220014, S010A230014, S010A240014 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 Condition and Context The School Corporation is required to report graduation rate data for its public high school using the four-year adjusted cohort rate. 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 School Corporation did not have effective internal controls to ensure required documentation to support the reason for a student's removal from the high school graduation cohort for mobility reasons was prepared, reviewed, and retained. Although one person updated the reason for a student's removal in the Student Information System, and another reviewed the documentation and approved the reason, the internal control was not sufficient to ensure compliance. Of the seven students tested, the School Corporation provided incorrect supporting documentation to substantiate the removal of two students from the cohort. 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." INDIANA STATE BOARD OF ACCOUNTS 26 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause There were two instances we noted where proper documentation was not retained. For one of the instances, the employee preparing the documentation was aware of the documentation requirements for the mobility code used, the proper documentation was just not retained due to an oversight. For the other instance, the employee preparing the documentation was not aware of the documentation requirements of the specific mobility code used. Additionally, although the School Corporation had a documented internal control in place where one person updated the reason for a student's removal in the Student Information System, and another person reviewed the documentation and approved the reason, the internal control was not sufficient to ensure proper documentation was prepared, reviewed, and retained for all students removed from the cohort. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation cannot ensure proper documentation is maintained to support the removal of all students from the high school graduation cohort for mobility reasons. As a result, proper documentation was not maintained for all students removed from the cohort to support their removal. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation strengthen its system of internal controls over students' removal from the high school graduation cohort for mobility reasons by ensuring the documentation supporting each student's removal from the cohort for mobility reasons is in compliance with the different documentation requirements established by the Indiana Department of Education. We also recommended strengthening the School Corporation policies and procedures to ensure that appropriate supporting documentation is retained to be presented for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.