Finding Text
FINDING 2023-003
Subject: Title I Grants to Local Educational Agencies - Eligibility
Federal Agency: Department of Education
Federal Program: Title I Grants to Local Educational Agencies
Assistance Listings Number: 84.010
Federal Award Numbers and Years (or Other Identifying Numbers): S010A200014, S010A210014,
S010A220014
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Findings: Material Weakness, Modified Opinion
Repeat Finding
This is a repeat finding from the prior audit report. The prior audit finding number was 2021-006.
Condition and Context
Eligibility for Title I is determined on the Eligible School Summary of the Tile I application.
Enrollment and Poverty numbers are automatically pulled from the Indiana Department of Education's
(IDOE) Official Pupil Enrollment (PE) count for each school into the Eligible School Summary page of the
Tile I application. These counts that are pre-populated should be based on the School Corporation's
records as of October of the prior fiscal year. One person compiled and uploaded enrollment data, including
poverty status for Real Time reports, to the IDOE without a documented oversight or review process to
ensure that the information was accurate. In addition, there was no review by the School Corporation of
the enrollment and poverty counts that were pre-populated into the School Corporation's Title I grant
application.
The IDOE used the October 1 Real Time (RT) reports for fiscal years 2020-2021 and 2021-2022,
as provided by the School Corporation, to determine Title I Eligibility for the 2021-2022 and 2022-2023
grant programs, respectively. The October 1 Real Time report could not be presented for audit for
2021-2022, which would have been used to pull in enrollment and poverty information for the 2022-2023
grant. As such, we were unable to verify the amounts reported in the grant application. Additionally, we
were unable to verify if the correct socioeconomic status was properly reported for any of the students.
The lack of internal controls was a systemic issue throughout the audit period. The lack of documentation
presented for audit was an issue for the 2022-2023 grant.
INDIANA STATE BOARD OF ACCOUNTS 18
RUSH COUNTY SCHOOLS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
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). . . ."
2 CFR 200.334 states in part:
"Financial records, supporting documents, statistical records, and all other non-Federal entity
records pertinent to a Federal award must be retained for a period of three years from the date
of submission of the final expenditure report or, for Federal awards that are renewed quarterly
or annually, from the date of submission of the quarterly or annual financial report, respectively,
as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient.
. . ."
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.
Effect
Without the proper implementation of an effectively designed system of internal controls, the
internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance. As a result, Real Time reports were not maintained for audit, and, as such, we could not
determine if the School Corporation complied with the Eligibility compliance requirement.
Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of
the federal award could result in the loss of future federal funding to the School Corporation.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that management of the School Corporation establish a proper system of
internal controls and develop policies and procedures to ensure Real Time reports are maintained for audit.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.