Finding Text
FINDING 2023-004
Subject: Title I Grants to Local Educational Agencies - Internal Controls
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: Special Tests and Provisions - Assessment System Security
Audit Finding: Material Weakness
Repeat Finding
This is a repeat finding from the prior audit report. The prior audit finding number was 2021-006.
Condition and Context
State educational agencies (SEA), in consultation with local educational agencies (LEA), are
required to establish and maintain an assessment security system that is valid, reliable, and consistent with
relevant professional and technical standards. Within their assessment system, SEAs must have policies
and procedures to maintain test security measures and ensure that LEAs implement those policies and
procedures. As such the Indiana Department of Education created and published the Indiana Assessments
Policy Manual.
As a part of the assessment security, any individual who administers, handles, or has access to
secure test materials at the school or school corporation shall complete assessment training and sign a
testing security and integrity statement that remains on file in the appropriate building-level office each year.
Each individual required to sign the testing integrity agreement shall sign the form by an established date.
The School Corporation had a process to provide assessment system security training and to
ensure each employee that attended training signed the agreement indicating training was received.
However, there was no documentation of a review process to confirm that all appropriate staff completed
assessment system security training as required.
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). . . ."
INDIANA STATE BOARD OF ACCOUNTS 20
RUSH COUNTY SCHOOLS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
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 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 establish a proper system of
internal controls and develop policies and procedures to ensure documentation of internal controls is
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.