FINDING 2023-002
Subject: COVID-19 - Education Stabilization Fund - Reporting
Federal Agency: Department of Education
Federal Program: COVID-19 - Education Stabilization Fund
Assistance Listings Numbers: 84.425D, 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
Audit Findings: Material Weakness, Other Matters
Condition and Context
The School Corporation had not properly designed or implemented a system of internal controls,
which would include appropriate segregation of duties, that would likely be effective in preventing, or
detecting and correcting, noncompliance.
INDIANA STATE BOARD OF ACCOUNTS
18
GREENCASTLE COMMUNITY SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
The School Corporation was required to submit an annual data report to the Indiana Department
of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to,
current period expenditures, prior period expenditures, and expenditures per activity. The reports were
prepared by one employee without an oversight, review, or approval process in place to prevent, or detect
and correct, errors.
Data for four of the six reports tested during the audit period could not be traced to the records that
accumulated and summarized the data. The following errors were identified when tracing key line items to
supporting documentation:
ESSER I - Year II Report
'Addressing Physical Health and Safety - Supplies' was understated by $12,522, and 'Meeting
Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports)
- Supplies' was overstated $19.
ESSER II - Year I Report
'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health
Supports) - Personnel Services - Salaries' was understated by $20,536, and 'Meeting Students'
Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies'
was understated by $1,321.
ESSER II - Year II Report
'Addressing Physical Health and Safety Uses - Supplies' was understated by $5,764, and
'Meeting Students' Academic, Social, Emotional, and Other Needs Uses (Excluding Mental
Health Supports) - Personnel Services - Salaries' was overstated $264.
ESSER III - Year II Report
'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health
Supports) - Personnel Services - Salaries' was overstated $141, and 'Meeting Students'
Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies'
was understated by $75,303.
The lack of internal controls was a systemic issue throughout the audit period. The noncompliance
was isolated to four of the six reports filed.
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
19
GREENCASTLE COMMUNITY SCHOOL CORPORATION
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. . . .
(3) Records that identify adequately the source and application of funds for federallyfunded
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."
Cause
A proper system of internal controls was not designed by management of the School Corporation.
Embedded within a properly designed and implemented internal control system should be internal controls
consisting of policies and procedures. Policies reflect the School Corporation's management statements
of what should be done to effect internal controls, and procedures should consist of actions that would
implement these policies.
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. As a result, reports were not supported by the School Corporation's underlying accounting
records and key line items were misstated.
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 management of the School Corporation establish a proper system of
internal controls and develop policies and procedures to ensure reports are supported by the records and
key line items are accurate.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.