Finding Text
FINDING 2025-006 Subject: Title I Grants to Local Educational Agencies - Eligibility 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: Eligibility Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-003. INDIANA STATE BOARD OF ACCOUNTS 23 RUSH COUNTY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirement. Eligibility for Title I is determined on the Eligible School Summary of the Title I application. Enrollment and Poverty numbers are automatically pulled from the Indiana Department of Education's (IDOE) Official Pupil Enrollment (PE) count for each school into the Eligible School Summary page of the Tile I application. These counts that are prepopulated should be based on the School Corporation's records as of October of the prior fiscal year. Data from the School Corporation's student software system (Real Time data reports) was uploaded to the IDOE's Data Exchange System. Enrollment information for the School Corporation was then abstracted by the IDOE from the Data Exchange System and prepopulated into the Title I application for the School Corporation. The poverty counts in the Title I application are prepopulated from the direct certifications listings by the IDOE. The School Corporation also downloads the direct certification listings into its student management software to support the poverty counts. The October 1, 2022 and 2023 Real Time data reports, which were used to prepopulate the School Corporation's enrollment numbers for the 2023-2024 and 2024-2025 Title I applications, were tested for accuracy. Students were selected from the Real Time reports. One employee compiled and uploaded enrollment data, including poverty status for Real Time reports into the Title I application, without a documented oversight or review process to ensure that the information was accurate. In addition, there was no review by the School Corporation of the enrollment and poverty counts that were prepopulated into the School Corporation's Title I grant application. Of the 40 students tested for accuracy of the 2023-2024 and 2024-2025 Title I grant application student enrollment data, the reported socioeconomic status of 2 students did not agree to supporting documentation. The lack of internal controls and the 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 24 RUSH COUNTY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 34 CFR 200.78(a)(1) states: "After reserving funds, as applicable, under § 200.77, including funds for equitable services for private school students, their teachers, and their families, an LEA must allocate funds under this subpart to school attendance areas and schools, identified as eligible and selected to participate under section 1113(a) or (b) of the ESEA, in rank order on the basis of the total number of public school children from low-income families in each area or school." Cause There has been turnover in the Grant Coordinator position for this School Corporation, and the new employee hired for this position is working to become familiar with specific requirements for this grant, including the design and implementation of specific internal control processes to ensure compliance with the grant agreement. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. 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 There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the Title I application enrollment and poverty information and that appropriate reviews, approval, and oversight are taking place to ensure compliance with the grant agreement. Additionally, management should develop policies and procedures to ensure the accuracy of students' enrollment and poverty counts information in the application. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.