Finding 382836 (2023-005)

Material Weakness
Requirement
ABH
Questioned Costs
-
Year
2023
Accepted
2024-03-21
Audit: 296449
Organization: Northeast School Corporation (IN)
Auditor: Crowe LLP

AI Summary

  • Core Issue: The School Corporation lacked effective internal controls to ensure compliance with federal requirements for the Special Education Cluster grants.
  • Impacted Requirements: Compliance with Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance was not maintained.
  • Recommended Follow-Up: Management should implement a robust internal control system with documented policies and procedures to ensure proper oversight and compliance.

Finding Text

FINDING 2023-005 Information on the federal program: Subject: Special Education Cluster (IDEA) - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 19611-022-PN01, 20611-022-PN01, 21611-022-PN01, 22611-022-PN01, 22611-022-ARP, 23611-022-PN01, 20619-022-PN01, 21619-022- PN01, 22619-022-PN01, 22619-022-ARP, 23619-022-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Audit Finding: Material Weakness, Qualified Opinion 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 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)...." Condition: The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance compliance requirements. The Cooperative had not designed or implemented adequate policies or procedures to determine that grant expenditures were for the excess costs of providing special education and related services to children with disabilities, were in conformance with the applicable cost principles and were obligated during the award period of performance. There was no documented oversight, review, or approval process in place at the Cooperative to ensure expenditures were allowable, conformed with cost principles and were incurred during the period of performance. 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 design or implementation of the components of a system of internal control, including policies and procedures that provide segregation of duties and additional oversight as needed, the control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of the Greene-Sullivan Special Education Cooperative (Cooperative). During fiscal year 2021-2022 and 2022-2023, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance compliance requirements. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance compliance requirements. The Cooperative had not designed or implemented adequate policies or procedures to determine that grant expenditures were for the excess costs of providing special education and related services to children with disabilities, were in conformance with the applicable cost principles and were obligated during the award period of performance. There was no documented oversight, review, or approval process in place at the Cooperative to ensure expenditures were allowable, conformed with cost principles and were incurred during the period of performance. The lack of internal controls was a systemic issue throughout the audit period. Identification as a repeat finding: No Recommendation: We recommended that management of the School Corporation design and implement a proper system of internal control, including policies and procedures, that are documented that would provide segregation of duties to ensure appropriate reviews, approvals and oversight are taking place. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Categories

Internal Control / Segregation of Duties Allowable Costs / Cost Principles Material Weakness Period of Performance Subrecipient Monitoring Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 382835 2023-005
    Material Weakness
  • 382837 2023-005
    Material Weakness
  • 382838 2023-005
    Material Weakness
  • 382839 2023-005
    Material Weakness
  • 382840 2023-005
    Material Weakness
  • 382841 2023-005
    Material Weakness
  • 382842 2023-005
    Material Weakness
  • 382843 2023-005
    Material Weakness
  • 382844 2023-005
    Material Weakness
  • 382845 2023-005
    Material Weakness
  • 382846 2023-006
    Material Weakness
  • 382847 2023-006
    Material Weakness
  • 382848 2023-006
    Material Weakness
  • 382849 2023-006
    Material Weakness
  • 382850 2023-006
    Material Weakness
  • 382851 2023-006
    Material Weakness
  • 382852 2023-006
    Material Weakness
  • 382853 2023-006
    Material Weakness
  • 382854 2023-006
    Material Weakness
  • 382855 2023-006
    Material Weakness
  • 382856 2023-006
    Material Weakness
  • 382857 2023-007
    Material Weakness
  • 382858 2023-007
    Material Weakness
  • 382859 2023-007
    Material Weakness
  • 382860 2023-007
    Material Weakness
  • 382861 2023-007
    Material Weakness
  • 382862 2023-007
    Material Weakness
  • 382863 2023-007
    Material Weakness
  • 382864 2023-007
    Material Weakness
  • 382865 2023-007
    Material Weakness
  • 382866 2023-007
    Material Weakness
  • 382867 2023-007
    Material Weakness
  • 382868 2023-008
    Significant Deficiency
  • 382869 2023-004
    Material Weakness
  • 382870 2023-004
    Material Weakness
  • 382871 2023-004
    Material Weakness
  • 382872 2023-003
    Material Weakness
  • 959277 2023-005
    Material Weakness
  • 959278 2023-005
    Material Weakness
  • 959279 2023-005
    Material Weakness
  • 959280 2023-005
    Material Weakness
  • 959281 2023-005
    Material Weakness
  • 959282 2023-005
    Material Weakness
  • 959283 2023-005
    Material Weakness
  • 959284 2023-005
    Material Weakness
  • 959285 2023-005
    Material Weakness
  • 959286 2023-005
    Material Weakness
  • 959287 2023-005
    Material Weakness
  • 959288 2023-006
    Material Weakness
  • 959289 2023-006
    Material Weakness
  • 959290 2023-006
    Material Weakness
  • 959291 2023-006
    Material Weakness
  • 959292 2023-006
    Material Weakness
  • 959293 2023-006
    Material Weakness
  • 959294 2023-006
    Material Weakness
  • 959295 2023-006
    Material Weakness
  • 959296 2023-006
    Material Weakness
  • 959297 2023-006
    Material Weakness
  • 959298 2023-006
    Material Weakness
  • 959299 2023-007
    Material Weakness
  • 959300 2023-007
    Material Weakness
  • 959301 2023-007
    Material Weakness
  • 959302 2023-007
    Material Weakness
  • 959303 2023-007
    Material Weakness
  • 959304 2023-007
    Material Weakness
  • 959305 2023-007
    Material Weakness
  • 959306 2023-007
    Material Weakness
  • 959307 2023-007
    Material Weakness
  • 959308 2023-007
    Material Weakness
  • 959309 2023-007
    Material Weakness
  • 959310 2023-008
    Significant Deficiency
  • 959311 2023-004
    Material Weakness
  • 959312 2023-004
    Material Weakness
  • 959313 2023-004
    Material Weakness
  • 959314 2023-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.425 Covid-19 - Education Stabilization Fund $1.15M
10.553 School Breakfast Program $285,585
84.010 Title I Grants to Local Educational Agencies $245,381
10.555 National School Lunch Program $95,364
84.027 Special Education_grants to States $81,850
93.778 Medical Assistance Program $34,609
84.367 Improving Teacher Quality State Grants $33,379
84.027 Covid-19 - Special Education_grants to States $26,268
84.424 Student Support and Academic Enrichment Program $11,479
84.173 Special Education_preschool Grants $4,151
84.173 Covid-19 - Special Education_preschool Grants $1,241