Finding Text
FINDING 2025-007 Subject: Title I Grants to Local Educational Agencies - Earmarking 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 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion Condition and Context A portion of the School Corporation's Title I allocation was required to be set aside for parent and family engagement and homeless reservation. The amounts required to be set aside were indicated in the Title I grant application. The School Corporation was responsible for monitoring each required set-aside throughout the life of the grant to ensure the obligations were met. There was no oversight or review process in place to ensure the monitoring of each required set-aside. The School Corporation did not expend the required minimum amount for parent and family engagement for the fiscal year 2023-2024 Title I grant. The School Corporation could not provide documentation to show that the obligation was met or not met to service all the homeless students in the School Corporation, and it could not be determined if the unused funds were transferred to the next grant award. 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: INDIANA STATE BOARD OF ACCOUNTS 30 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 6318(a)(3) states in part: "(A) In general Each local educational agency shall reserve at least 1 percent of its allocation under subpart 2 to assist schools to carry out the activities described in this section, except that this subparagraph shall not apply if 1 percent of such agency's allocation under subpart 2 for the fiscal year for which the determination is made is $5,000 or less. Nothing in this subparagraph shall be construed to limit local educational agencies from reserving more than 1 percent of its allocation under subpart 2 to assist schools to carry out activities described in this section. . . . (D) Use of Funds Funds reserved under subparagraph (A) by a local educational agency shall be used to carry out activities and strategies consistent with the local educational agency's parent and family engagement policy, including not less than 1 of the following: (i) Supporting schools and nonprofit organizations in providing professional development for local educational agency and school personnel regarding parent and family engagement strategies, which may be provided jointly to teachers, principals, other school leaders, specialized instructional support personnel, paraprofessionals, early childhood educators, and parents and family members. (ii) Supporting programs that reach parents and family members at home, in the community, and at school. (iii) Disseminating information on best practices focused on parent and family engagement, especially best practices for increasing the engagement of economically disadvantaged parents and family members. (iv) Collaborating, or providing subgrants to schools to enable such schools to collaborate, with community-based or other organizations or employers with a record of success in improving and increasing parent and family engagement. (v) Engaging in any other activities and strategies that the local educational agency determines are appropriate and consistent with such agency's parent and family engagement policy." INDIANA STATE BOARD OF ACCOUNTS 31 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 20 USC 6313(c)(3) states: "(A) In general A local educational agency shall reserve such funds as are necessary under this part, determined in accordance with subparagraphs (B) and (C), to provide services comparable to those provided to children in schools funded under this part to serve— (i) homeless children and youths, including providing educationally related support services to children in shelters and other locations where children may live; (ii) children in local institutions for neglected children; and (iii) if appropriate, children in local institutions for delinquent children, and neglected or delinquent children in community day programs. Cause The School Corporation did not have internal controls in place to review parent and family involvement and homeless reservation transactions to ensure they were properly recorded and attributed to the correct expense type. The School Corporation's financial management system was not set up to separately track program expenditures relating to parent and family engagement and homeless reservation. Effect The failure to design and implement an effective internal control system, as well as not tracking expenditures related to parent and family involvement and homeless reservation expenditures, caused noncompliance with the compliance requirement as detailed in the Condition and Context. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation design and implement a set of internal controls that will allow them to ensure the earmarked funds are being used for the correct expenses, are being recorded properly, and are being reported properly to the Indiana Department of Education. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.