FAC Explorer

Finding 1238918 (2025-023)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2025
Accepted
2026-09-30
Audit: 413792
Organization: South Bend Community School Corporation (IN)
Auditor: INDIANA STATE BOARD OF ACCOUNTS

AI Summary

  • Core Issue: The School Corporation failed to submit accurate reimbursement requests and final expenditure reports for Title I grants, lacking proper documentation and internal controls.
  • Impacted Requirements: Noncompliance with federal regulations (2 CFR 200.303, 200.334, 200.302) regarding financial management and reporting for federal awards.
  • Recommended Follow-Up: Implement a formal internal control system with documented review processes, ensure segregation of duties, and provide training for staff to support grant compliance.

Finding Text

FINDING 2025-023 Subject: Title I Grants to Local Educational Agencies - Reporting 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): S010A210014, S010A220014, S010A230014, S010A240014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting 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 2023-006. Condition and Context The School Corporation was required to submit reimbursement requests and final expenditure reports that included, among other data, both current and prior period expenditures. However, the required reports for federal awards did not capture all activity for the reporting period and were not supported by the School Corporation's records. Reimbursement Requests The School Corporation uses reimbursement requests to claim allowable expenses paid from the Title I funds. These requests must be based on and supported by transactions recorded within the School Corporation's Title I accounts. Although internal controls were in place, they were not effective in ensuring the accuracy of the reimbursement requests. Of the 11 reimbursement requests selected for testing, 9 could not be verified against either the summary-level detail attached to the request or a detailed transaction listing. Because the amounts requested for reimbursement could not be traced to underlying records or to reports that accumulated or summarized the data, the accuracy and completeness of the reimbursement requests could not be verified. INDIANA STATE BOARD OF ACCOUNTS 70 SOUTH BEND COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Final Expenditure Reports There was no documented internal control to show a review and oversight process was in place to ensure the accuracy and completeness of the final expenditure reports. 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). . . ." 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 Federal awards that are renewed quarterly or annually, from the date of the 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. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." INDIANA STATE BOARD OF ACCOUNTS 71 SOUTH BEND COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not design or implement an effective internal control system to ensure the accuracy and compliance of reimbursement and final expenditure reporting processes. Specifically, the School Corporation did not have established procedures requiring the retention of detailed supporting documentation for reimbursement requests, and oversight responsibilities were not consistently carried out or evidenced over the reimbursement requests and final expenditure reports. Effect Because the School Corporation did not retain detailed documentation to support reimbursement requests or provide evidence of the required review of final expenditure reports, the audit team could not verify the accuracy or completeness of expenditures charged to the grant. As a result, the risk of misreporting, misallocation of federal funds, and potential violations of grant requirements were heightened. Questioned Costs There were no questioned costs identified. Recommendation The School Corporation should establish and implement a formal internal control system to ensure accurate financial reporting and compliance with federal grant requirements. This system should include documented review procedures, clear segregation of duties, and consistent oversight of reimbursement requests and expenditure reports. All financial submissions should be supported by verifiable documentation and reconciled with internal records prior to submission. Additionally, the School Corporation should provide necessary support and resources to staff responsible for ensuring grant compliance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Corrective Action Plan

FINDING 2025-023 Finding Subject: Title I Grants to Local Educational Agencies - Reporting Contact Person Responsible for Corrective Action: Jenna Harrington, Ahnaf Tahmid & Marlaina Johns Contact Phone Number and Email Address: 574-393-6000, jharrington@sbcsc.k12.in.us, atahmid@sbcsc.k12.in.us, mjohns2@sbcsc.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: A comprehensive Internal Controls Manual was written and released in December 2024 with implementation beginning July 1, 2025. This includes segregation of duties, purchasing processes, contacts process, grant processing, Grant Reimbursements The reimbursement process was updated to include all required supporting documentation, such as transaction detail and summary reports. Each request is also reviewed and signed by the supervisor to document approval. On a recurring basis, the Director of Federal Grants generates the detailed expenditure report and budget summary. The detailed report is filtered to capture only the transactions occurring since the previous reimbursement request, making new expenditures easy to identify. These amounts are added to the cumulative reimbursement totals, which are then compared to the total disbursements shown on the summary report to ensure they align. Once the totals match, the reimbursement request is reviewed by the Chief Financial Officer and submitted to the awarding agency. Since there was no reimbursement form for this grant, the supervisor review signature was not always collected. It has been added on one of the sheets within the supporting documents of the packet. Financial Reporting Reviewing The fiscal officers managing the grant will have their supervisor review financial reports prior to submission and sign their approval. Anticipated Completion Date: July 1, 2025

Categories

Internal Control / Segregation of Duties Subrecipient Monitoring

Other Findings in this Audit

  • 1238847 2025-003
    Material Weakness Repeat
  • 1238848 2025-003
    Material Weakness Repeat
  • 1238849 2025-003
    Material Weakness Repeat
  • 1238850 2025-003
    Material Weakness Repeat
  • 1238851 2025-003
    Material Weakness Repeat
  • 1238852 2025-003
    Material Weakness Repeat
  • 1238853 2025-003
    Material Weakness Repeat
  • 1238854 2025-004
    Material Weakness Repeat
  • 1238855 2025-004
    Material Weakness Repeat
  • 1238856 2025-004
    Material Weakness Repeat
  • 1238857 2025-004
    Material Weakness Repeat
  • 1238858 2025-004
    Material Weakness Repeat
  • 1238859 2025-004
    Material Weakness Repeat
  • 1238860 2025-004
    Material Weakness Repeat
  • 1238861 2025-005
    Material Weakness Repeat
  • 1238862 2025-005
    Material Weakness Repeat
  • 1238863 2025-005
    Material Weakness Repeat
  • 1238864 2025-005
    Material Weakness Repeat
  • 1238865 2025-005
    Material Weakness Repeat
  • 1238866 2025-005
    Material Weakness Repeat
  • 1238867 2025-006
    Material Weakness Repeat
  • 1238868 2025-006
    Material Weakness Repeat
  • 1238869 2025-007
    Material Weakness Repeat
  • 1238870 2025-007
    Material Weakness Repeat
  • 1238871 2025-008
    Material Weakness Repeat
  • 1238872 2025-008
    Material Weakness Repeat
  • 1238873 2025-009
    Material Weakness Repeat
  • 1238874 2025-009
    Material Weakness Repeat
  • 1238875 2025-010
    Material Weakness Repeat
  • 1238876 2025-010
    Material Weakness Repeat
  • 1238877 2025-011
    Material Weakness Repeat
  • 1238878 2025-011
    Material Weakness Repeat
  • 1238879 2025-012
    Material Weakness Repeat
  • 1238880 2025-012
    Material Weakness Repeat
  • 1238881 2025-013
    Material Weakness Repeat
  • 1238882 2025-013
    Material Weakness Repeat
  • 1238883 2025-014
    Material Weakness Repeat
  • 1238884 2025-014
    Material Weakness Repeat
  • 1238885 2025-015
    Material Weakness Repeat
  • 1238886 2025-015
    Material Weakness Repeat
  • 1238887 2025-016
    Material Weakness Repeat
  • 1238888 2025-016
    Material Weakness Repeat
  • 1238889 2025-017
    Material Weakness Repeat
  • 1238890 2025-017
    Material Weakness Repeat
  • 1238891 2025-018
    Material Weakness Repeat
  • 1238892 2025-018
    Material Weakness Repeat
  • 1238893 2025-019
    Material Weakness Repeat
  • 1238894 2025-019
    Material Weakness Repeat
  • 1238895 2025-019
    Material Weakness Repeat
  • 1238896 2025-019
    Material Weakness Repeat
  • 1238897 2025-019
    Material Weakness Repeat
  • 1238898 2025-019
    Material Weakness Repeat
  • 1238899 2025-019
    Material Weakness Repeat
  • 1238900 2025-019
    Material Weakness Repeat
  • 1238901 2025-020
    Material Weakness Repeat
  • 1238902 2025-020
    Material Weakness Repeat
  • 1238903 2025-020
    Material Weakness Repeat
  • 1238904 2025-020
    Material Weakness Repeat
  • 1238905 2025-020
    Material Weakness Repeat
  • 1238906 2025-020
    Material Weakness Repeat
  • 1238907 2025-020
    Material Weakness Repeat
  • 1238908 2025-020
    Material Weakness Repeat
  • 1238909 2025-021
    Material Weakness Repeat
  • 1238910 2025-021
    Material Weakness Repeat
  • 1238911 2025-021
    Material Weakness Repeat
  • 1238912 2025-021
    Material Weakness Repeat
  • 1238913 2025-021
    Material Weakness Repeat
  • 1238914 2025-022
    Material Weakness Repeat
  • 1238915 2025-022
    Material Weakness Repeat
  • 1238916 2025-022
    Material Weakness Repeat
  • 1238917 2025-023
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.010 TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES 2024 $11.75M
10.555 NATIONAL SCHOOL LUNCH PROGRAM 2024 $9.52M
84.010 TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES 2025 $8.27M
10.555 NATIONAL SCHOOL LUNCH PROGRAM 2025 $8.02M
84.027 SPECIAL EDUCATION GRANTS TO STATES 2025 $4.53M
84.374 TEACHER AND SCHOOL LEADER INCENTIVE GRANTS (FORMERLY THE TEACHER INCENTIVE FUND) 2024 $3.40M
10.553 SCHOOL BREAKFAST PROGRAM 2024 $3.00M
10.553 SCHOOL BREAKFAST PROGRAM 2025 $2.41M
84.334 GAINING EARLY AWARENESS AND READINESS FOR UNDERGRADUATE PROGRAMS 2024 $1.83M
84.184 SCHOOL SAFELY NATIONAL ACTIVITIES 2024 $1.69M
84.334 GAINING EARLY AWARENESS AND READINESS FOR UNDERGRADUATE PROGRAMS 2025 $1.63M
84.367 SUPPORTING EFFECTIVE INSTRUCTION STATE GRANTS (FORMERLY IMPROVING TEACHER QUALITY STATE GRANTS) 2024 $1.11M
84.336 TEACHER QUALITY PARTNERSHIP GRANTS 2024 $1.05M
84.336 TEACHER QUALITY PARTNERSHIP GRANTS 2025 $1.01M
10.558 CHILD AND ADULT CARE FOOD PROGRAM 2024 $957,987
84.011 MIGRANT EDUCATION STATE GRANT PROGRAM 2024 $929,569
84.215 INNOVATIVE APPROACHES TO LITERACY; PROMISE NEIGHBORHOODS; FULL-SERVICE COMMUNITY SCHOOLS; AND CONGRESSIONALLY DIRECTED SPENDING FOR ELEMENTARY AND SECONDARY EDUCATION COMMUNITY PROJECTS 2024 $910,537
97.036 DISASTER GRANTS - PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) 2024 $881,458
84.184 SCHOOL SAFELY NATIONAL ACTIVITIES 2025 $855,321
84.051 CAREER AND TECHNICAL EDUCATION -- NATIONAL PROGRAMS 2025 $839,868
10.558 CHILD AND ADULT CARE FOOD PROGRAM 2025 $707,849
84.424 STUDENT SUPPORT AND ACADEMIC ENRICHMENT PROGRAM 2024 $698,029
32.004 UNIVERSAL SERVICE FUND - SCHOOLS AND LIBRARIES 2024 $689,885
84.011 MIGRANT EDUCATION STATE GRANT PROGRAM 2025 $639,019
84.215 INNOVATIVE APPROACHES TO LITERACY; PROMISE NEIGHBORHOODS; FULL-SERVICE COMMUNITY SCHOOLS; AND CONGRESSIONALLY DIRECTED SPENDING FOR ELEMENTARY AND SECONDARY EDUCATION COMMUNITY PROJECTS 2025 $610,051
93.778 GRANTS TO STATES FOR MEDICAID 2024 $518,707
84.424 STUDENT SUPPORT AND ACADEMIC ENRICHMENT PROGRAM 2025 $456,802
84.367 SUPPORTING EFFECTIVE INSTRUCTION STATE GRANTS (FORMERLY IMPROVING TEACHER QUALITY STATE GRANTS) 2025 $408,733
93.778 GRANTS TO STATES FOR MEDICAID 2025 $402,182
84.048 CAREER AND TECHNICAL EDUCATION -- BASIC GRANTS TO STATES 2024 $346,769
84.027 SPECIAL EDUCATION GRANTS TO STATES 2024 $340,862
84.365 ENGLISH LANGUAGE ACQUISITION STATE GRANTS 2024 $328,319
84.048 CAREER AND TECHNICAL EDUCATION -- BASIC GRANTS TO STATES 2025 $308,148
10.559 SUMMER FOOD SERVICE PROGRAM FOR CHILDREN 2025 $270,301
32.004 UNIVERSAL SERVICE FUND - SCHOOLS AND LIBRARIES 2025 $262,809
10.559 SUMMER FOOD SERVICE PROGRAM FOR CHILDREN 2024 $217,903
84.002 ADULT EDUCATION - BASIC GRANTS TO STATES 2024 $209,421
84.365 ENGLISH LANGUAGE ACQUISITION STATE GRANTS 2025 $206,296
84.002 ADULT EDUCATION - BASIC GRANTS TO STATES 2025 $146,692
84.374 TEACHER AND SCHOOL LEADER INCENTIVE GRANTS (FORMERLY THE TEACHER INCENTIVE FUND) 2025 $131,008
93.566 REFUGEE AND ENTRANT ASSISTANCE STATE/REPLACEMENT DESIGNEE ADMINISTERED PROGRAMS 2024 $120,657
84.173 SPECIAL EDUCATION PRESCHOOL GRANTS 2025 $114,612
84.425 EDUCATION STABILIZATION FUND 2025 $78,748
93.243 SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES PROJECTS OF REGIONAL AND NATIONAL SIGNIFICANCE 2024 $57,647
84.196 EDUCATION FOR HOMELESS CHILDREN AND YOUTH 2025 $35,554
84.051 CAREER AND TECHNICAL EDUCATION -- NATIONAL PROGRAMS 2024 $29,386
84.425 EDUCATION STABILIZATION FUND 2024 $27,119
93.566 REFUGEE AND ENTRANT ASSISTANCE STATE/REPLACEMENT DESIGNEE ADMINISTERED PROGRAMS 2025 $26,191
10.582 FRESH FRUIT AND VEGETABLE PROGRAM 2024 $13,468
84.173 SPECIAL EDUCATION PRESCHOOL GRANTS 2024 $7,749