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FINDING 2025-008 Subject: Special Education Cluster (IDEA) - Matching, Level of Effort, Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 21611-113-PN01, 22611-113-PN01, 23611-113-PN01, 24611-113-PN01, H027X210084, 23619-113-PN01, 24619-113-PN01, 25619-113-PN01, 22619-113-ARP, 86203 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Finding: Material Weakness Condition and Context The Form 9 (financial) data was submitted by the School Corporation to the Indiana Department of Education (IDOE) semi-annually. The data reported included the School Corporation's expenditures recorded during that period. The IDOE calculated Maintenance of Effort based on the expenditure information submitted on Form 9 for that fiscal year. To verify amounts used by the IDOE in their computation were derived from the books and records of the School Corporation, costs were reviewed to ensure they were recorded properly as to account and object code and reported correctly on the Form 9. INDIANA STATE BOARD OF ACCOUNTS 29 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation did not have an oversight process in place to ensure that expenditures for vendors were posted to the correct fund, account, and object codes. During review of expenditures, it was determined that there was not a documented second review in place for all vendor payments being made. This issue was systemic throughout the audit period. 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). . . ." Cause One person entered and posted vendor expenditures in the accounting system without a review in place to ensure the expenditures were posted to the correct fund, account, and object codes. Although additional employees were involved in the claims process either by submitting paper accounts payable vouchers, signing invoices, or approving purchase orders for some claims we reviewed, there was no review by a second person after the expenditures were entered into the accounting system. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation cannot ensure that expenditures entered into the accounting system are coded correctly. Incorrect coding of expenditures in the accounting system can result in incorrect Maintenance of Effort calculations. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish and implement an effective system of internal controls over vendor expenditures to ensure expenditures for vendors are posted to the correct fund, account, and object codes. For all vendor expenditures, we recommended they are reviewed by an individual other than the person entering them into the accounting system, along with the supporting documentation of the expenditure, and that this process is documented as to the preparer and reviewer. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.