Finding Text
FINDING 2023-002
Subject: COVID-19 - Emergency Connectivity Fund Program - Internal Controls
Federal Agency: Federal Communications Commission
Federal Program: COVID-19 - Emergency Connectivity Fund Program
Assistance Listings Number: 32.009
Federal Award Number and Year (or Other Identifying Number): ECF2190010591
Compliance Requirements: Equipment and Real Property; Special Tests
and Provisions - Restricted Purpose
Audit Finding: Material Weakness
INDIANA STATE BOARD OF ACCOUNTS
18
EAST ALLEN COUNTY SCHOOLS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
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 related to asset inventory and per-user limitations of the devices
purchased with Emergency Connectivity Fund (ECF) Program support.
For each connected device provided to an individual student the asset inventory must identify:
1. The device or equipment type (i.e., laptop, tablet, mobile hotspot, modem, router);
2. The device or equipment make/model;
3. The device or equipment serial number;
4. The full name of the person whom the device was provided; and
5. The dates the device was loaned out and returned to the school or the date the school was
notified that the device was missing, lost or damaged.
The School Corporation maintained an asset inventory for the purchased iPads with the identified
items noted above; however, the data was input into the asset listing from the equipment invoice by the IT
Department without a documented review or oversight process to prevent, or detect and correct, errors. In
addition, there was not a documented review or oversight process to ensure each student only received
one device.
The lack of internal controls was a systemic issue 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). . . ."
Cause
A proper system of internal controls was not designed by management of the School Corporation,
which would include segregation of key functions. 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.
INDIANA STATE BOARD OF ACCOUNTS 19
EAST ALLEN COUNTY SCHOOLS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Effect
Without the proper design or implementation of the components of a system of internal controls,
including policies and procedures that provide segregation of duties and additional oversight as needed,
the internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that management of the School Corporation design and implement a proper
system of internal controls, including policies and procedures that would provide segregation of duties to
ensure appropriate reviews, approvals, and oversight are taking place.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.