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FINDING 2025-007 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, Modified Opinion Condition and Context Eligibility for Title I is determined on the Eligible School Summary of the Title I application. Enrollment and poverty numbers for the public school district are automatically pulled from Indiana Department of Education's Official Pupil Enrollment count for each school into the Eligible School Summary page of the Title I application. Enrollment and poverty numbers for any nonpublic schools are manually entered into the Title I application by the School Corporation. The School Corporation was to obtain a list of students and their poverty status from the non-public schools to enter into the Title I application. INDIANA STATE BOARD OF ACCOUNTS 31 SCHOOL CITY OF EAST CHICAGO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) However, supporting documentation was not provided to verify the nonpublic schools' enrollment and poverty numbers included in the fiscal year 2023-2024 Title I application. In addition, supporting documentation was not provided to verify the nonpublic schools' poverty numbers and the total enrollment number was 42 students greater than the support provided for the 2024-2025 Title I application. The lack of internal controls and supporting documentation was systemic 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). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 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 Due to a turnover in Title I Directors, supporting documentation for the enrollment and poverty numbers included in the Title I applications could not be located. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 32 SCHOOL CITY OF EAST CHICAGO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that the School Corporation's management develop policies and procedures over the retention of the Title I application enrollment and poverty information for nonpublic schools. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.