Finding 36479 (2022-005)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2023-09-19

AI Summary

  • Core Issue: The School Corporation lacks an effective internal control system, leading to discrepancies in reported expenditures for Title I Grants.
  • Impacted Requirements: Noncompliance with federal regulations (2 CFR 200.303, 200.302(b), 34 CFR 76.722) regarding accurate financial reporting and record-keeping.
  • Recommended Follow-Up: Management should implement a robust internal control system to ensure compliance with grant agreements and reporting requirements.

Finding Text

FINDING 2022-005 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 Number and Year (or Other Identifying Number): S010A200014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Total expenditures reported on the 2020-2021 Final Expenditure Report (Report) were not supported by the School Corporation's ledgers. Total expenditures on the Report were $578,452 whereas expenditures per the ledgers were $677,514. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 21 CONCORD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. . . ." 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." 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. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause Management had not developed a system of internal controls that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds 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 to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. 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 2022-005 Finding: Internal controls were not in place/effective in relation to the Title I Annual Expenditure Reports filed during the audit period. Subsequently, the 20-21 Title I Annual Expenditure Report did not agree with School Corporation?s ledgers. $578,452 of expenditures were reported the Annual Expenditure Report and $677,514 from Fund 4121 on the ledgers. Contact Person Responsible for Corrective Action: Carrie McGuire Contact Phone Number: (574) 875-5161 Views of Responsible Official: We concur with the finding Description of Corrective Action Plan: When required annual federal grant reports are completed for submission, they will be reviewed by the treasurer for accuracy. Both the treasurer and the grants coordinator will sign off on the reports. In order to address the issue related to earmarking and set-asides within Title I not be completed, Concord Community Schools created a Grants and Assessment Coordinator position in May 2022. A person was hired to fill this position starting on July 1, 2022. One of the essential functions of this position is maintaining current and accurate records related to federal and state grants. Starting in January 2023, in addition to the Grants and Assessment Coordinator, a member of the business department will be a second reviewer and sign the semi-annual certifications. Anticipated Completion Date: December 31, 2023

Categories

Subrecipient Monitoring Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties Material Weakness Reporting

Other Findings in this Audit

  • 36460 2022-001
    Material Weakness
  • 36461 2022-002
    Material Weakness Repeat
  • 36462 2022-001
    Material Weakness
  • 36463 2022-002
    Material Weakness Repeat
  • 36464 2022-001
    Material Weakness
  • 36465 2022-002
    Material Weakness Repeat
  • 36466 2022-001
    Material Weakness
  • 36467 2022-002
    Material Weakness Repeat
  • 36468 2022-001
    Material Weakness
  • 36469 2022-002
    Material Weakness Repeat
  • 36470 2022-001
    Material Weakness
  • 36471 2022-002
    Material Weakness Repeat
  • 36472 2022-001
    Material Weakness
  • 36473 2022-002
    Material Weakness Repeat
  • 36474 2022-003
    Material Weakness
  • 36475 2022-004
    Material Weakness
  • 36476 2022-006
    Material Weakness
  • 36477 2022-003
    Material Weakness
  • 36478 2022-004
    Material Weakness
  • 36480 2022-006
    Material Weakness
  • 36481 2022-007
    Material Weakness
  • 36482 2022-007
    Material Weakness
  • 36483 2022-008
    Material Weakness
  • 36484 2022-007
    Material Weakness
  • 612902 2022-001
    Material Weakness
  • 612903 2022-002
    Material Weakness Repeat
  • 612904 2022-001
    Material Weakness
  • 612905 2022-002
    Material Weakness Repeat
  • 612906 2022-001
    Material Weakness
  • 612907 2022-002
    Material Weakness Repeat
  • 612908 2022-001
    Material Weakness
  • 612909 2022-002
    Material Weakness Repeat
  • 612910 2022-001
    Material Weakness
  • 612911 2022-002
    Material Weakness Repeat
  • 612912 2022-001
    Material Weakness
  • 612913 2022-002
    Material Weakness Repeat
  • 612914 2022-001
    Material Weakness
  • 612915 2022-002
    Material Weakness Repeat
  • 612916 2022-003
    Material Weakness
  • 612917 2022-004
    Material Weakness
  • 612918 2022-006
    Material Weakness
  • 612919 2022-003
    Material Weakness
  • 612920 2022-004
    Material Weakness
  • 612921 2022-005
    Material Weakness
  • 612922 2022-006
    Material Weakness
  • 612923 2022-007
    Material Weakness
  • 612924 2022-007
    Material Weakness
  • 612925 2022-008
    Material Weakness
  • 612926 2022-007
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
10.555 National School Lunch Program Fy 22 $2.76M
10.559 Summer Food Service Program for Children Fy 21 $1.81M
84.027 Special Education_grants to States Fy 21 $1.19M
84.027 Special Education_grants to States Fy 22 $740,592
84.425 Education Stabilization Fund Fy 22 $738,209
84.010 Title I Grants to Local Educational Agencies Fy 22 $578,452
10.553 School Breakfast Program Fy 22 $569,416
84.010 Title I Grants to Local Educational Agencies Fy 21 $213,465
10.555 National School Lunch Program Fy 21 $155,933
84.367 Improving Teacher Quality State Grants Fy 21 $121,173
93.778 Medical Assistance Program Fy 21 $100,831
93.778 Medical Assistance Program Fy 22 $79,036
10.559 Summer Food Service Program for Children Fy 22 $72,729
10.553 School Breakfast Program Fy 21 $59,272
84.365 English Language Acquisition State Grants Fy 21 $51,806
84.173 Special Education_preschool Grants Fy 21 $46,613
84.365 English Language Acquisition State Grants Fy 22 $16,439
84.425 Education Stabilization Fund Fy 21 $13,550
84.367 Improving Teacher Quality State Grants Fy 22 $4,085
10.649 Pandemic Ebt Administrative Costs Fy 22 $3,063