Finding 382596 (2023-006)

Significant Deficiency
Requirement
F
Questioned Costs
-
Year
2023
Accepted
2024-03-20
Audit: 296149
Organization: Portage Township Schools (IN)
Auditor: Crowe LLP

AI Summary

  • Core Issue: The School Corporation lacks an effective internal control system for managing equipment and real property under federal grants, risking noncompliance.
  • Impacted Requirements: Compliance with 2 CFR 200.313(d) is not met, including maintaining property records, conducting physical inventories, and ensuring proper safeguards.
  • Recommended Follow-Up: Management should implement a robust internal control system to ensure compliance with grant agreements and property management requirements.

Finding Text

Finding 2023-006 Information on the federal program: Subject: Education Stabilization Fund – Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Significant Deficiency Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: FINDING 2023-006 (Continued) (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." 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 Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For 1 of the 3 equipment purchases sampled, the School Corporation did not add the equipment purchase to the capital asset listing. Additionally, we noted no inventory was performed during the audit period. The finding is isolated to the ESSER II (84.425D) and ESSER III (84.425U) grants. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and Equipment and Real Property Management compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Categories

Equipment & Real Property Management Internal Control / Segregation of Duties

Other Findings in this Audit

  • 382586 2023-003
    Significant Deficiency
  • 382587 2023-003
    Significant Deficiency
  • 382588 2023-003
    Significant Deficiency
  • 382589 2023-004
    Material Weakness
  • 382590 2023-004
    Material Weakness
  • 382591 2023-004
    Material Weakness
  • 382592 2023-005
    Material Weakness
  • 382593 2023-005
    Material Weakness
  • 382594 2023-005
    Material Weakness
  • 382595 2023-006
    Significant Deficiency
  • 959028 2023-003
    Significant Deficiency
  • 959029 2023-003
    Significant Deficiency
  • 959030 2023-003
    Significant Deficiency
  • 959031 2023-004
    Material Weakness
  • 959032 2023-004
    Material Weakness
  • 959033 2023-004
    Material Weakness
  • 959034 2023-005
    Material Weakness
  • 959035 2023-005
    Material Weakness
  • 959036 2023-005
    Material Weakness
  • 959037 2023-006
    Significant Deficiency
  • 959038 2023-006
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.425 Covid-19 - Education Stabilization Fund $4.42M
84.027 Special Education_grants to States $1.13M
84.010 Title I Grants to Local Educational Agencies $1.03M
10.555 National School Lunch Program $719,413
84.367 Improving Teacher Quality State Grants $165,548
93.778 Medical Assistance Program $163,166
10.559 Summer Food Service Program for Children $124,089
84.424 Student Support and Academic Enrichment Program $91,607
84.027 Covid-19 - Special Education_grants to States $51,815
84.173 Special Education_preschool Grants $48,071
84.173 Covid-19 - Special Education_preschool Grants $47,278
97.036 Covid-19 - Disaster Grants - Public Assistance (presidentially Declared Disasters) $29,260
10.649 Pandemic Ebt Administrative Costs $6,198
84.365 English Language Acquisition State Grants $2,000
10.553 School Breakfast Program $772