Finding Text
Finding 2023-003
Information on the federal program:
Subject: Special Education Cluster (IDEA) –Earmarking
Federal Agency: Department of Education
Federal Programs: Special Education Grants to States, Special Education Preschool Grants
Assistance Listing Numbers: 84.027, 84.173
Federal Award Numbers and Years (or Other Identifying Numbers): 20611-047-PN01, 21611-047-PN01,
20619-047-PN01, 21619-047-PN01
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Matching, Level of Effort, and Earmarking
Audit Finding: Material Weakness, Other Matters
Criteria: 2 CFR 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards 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 200.207(a) states in part: "The Federal awarding agency or pass-through entity may impose
additional specific award conditions as needed . . ."
511 IAC 7-34-7(b) states:
"The public agency, in providing special education and related services to students in nonpublic schools
and facilities, must expend at least an amount that is the same proportion of the public agency total subgrant
under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by
their parents in nonpublic schools or facilities within its boundaries, is to the total number of students with
disabilities of the same age range."
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the earmarking portion of the
Matching, Level of Effort, Earmarking compliance requirement.
Cause: The School Corporation participates in a Special Education Cooperative that manages and
operates the special education program and oversees the majority of the federal compliance requirements.
The School Corporation's management had not developed a system of internal controls that would have
ensured compliance with the grant agreement and the Matching, Level of Effort, Earmarking
compliance requirement.
Effect: The failure to establish an effective internal control system placed the School Corporation in
noncompliance with the grant agreement and the Matching, Level of Effort, Earmarking compliance
requirement. Noncompliance with the grant agreement or the compliance requirement could have resulted
in the loss of federal funds to the School Corporation.
Questioned Costs: There were no questioned costs identified.
Context: The School Corporation did not meet the earmarking requirements for the grants, which
concluded during the audit period. Both the Special Education Grants to States and Special Education
Preschool Grants required a proportionate share of their funding to be spent on non-public school students
with disabilities. The 20611-047-PN01, 20619-047-PN01, 21611-047-PN01, 21619-047-PN01 grant
awards were fully expended during the audit period with minimum Non-Public Proportionate Share
earmarking requirements of $19,551, $2,421, $26,253, and $1,959, respectively. There was no supporting
documentation provided to support any non-public school expenditures were incurred towards the meeting
the non-public proportionate share requirement.
Identification as a repeat finding: Yes, Finding 2021-003.
Recommendation: We recommended that the School Corporation's management establish internal
controls to monitor earmarking requirements periodically to ensure compliance with the earmarking
compliance requirements by the end of the grant period. This includes meeting with the Cooperative
periodically to monitor and track progress towards meeting the earmarking requirements.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.