FINDING 2023-002
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. FINDING 2023-002 (Continued)
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.