Finding Text
FINDING 2023-007
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
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. The counts that are pre-populated should be based on the School Corporation's records
as of October of the prior fiscal year.
During the audit period, the School Corporation submitted two Title I Applications. The School
Corporation was required to use the October 2020 Real Time Report data for the 2021-2022 Title I
application and the October 2021 Real Time Report data for the 2022-2023 Title I Application submitted to
the IDOE. Data to be submitted included student socioeconomic status information.
The October 2021 Real Time Report used for the 2022-2023 Title I Application, was not available
for review. 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 and noncompliance were isolated to the October 2021 Real Time
Report and 2022-2023 Title I Application.
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 the 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. . . ."
34 CFR 200.78(a)(1) states:
"After reserving funds, as applicable, under § 200.77, including funds for equitable services for
private school students, their teachers, and their families, an LEA must allocate funds under
this subpart to school attendance areas and schools, identified as eligible and selected to
participate under section 1113(a) or (b) of the ESEA, in rank order on the basis of the total
number of public school children from low-income families in each area or school."
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 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, proper documentation was not maintained to ensure enrollment and poverty
statues in the Title I Application were accurate.
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 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 to ensure compliance.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.