Finding Text
FINDING 2023-005
Subject: Special Education Cluster (IDEA) - Period of Performance
Federal Agency: Department of Education
Federal Programs: Special Education Grants to States, Special Education Preschool Grants
Assistance Listings Numbers: 84.027, 84.173
Federal Award Numbers and Years (or Other Identifying Numbers): 19611-158-PN01, 19619-158-PN01,
20611-158-PN01, 20619-158-PN01
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Period of Performance
Audit Finding: Material Weakness
Condition and Context
The School Corporation was a member of the Clark County Joint Services Program (Cooperative).
During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the
federal money on behalf of all its member school corporations. As the grant agreements were between the
Indiana Department of Education (IDOE) and each member school corporation, the School Corporation
was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate
oversight performed by the School Corporation to ensure compliance with the Period of Performance
compliance requirement.
The School Corporation had not properly designed or implemented a system of internal controls to
ensure transactions made from Special Education funds occurred within the appropriate period of
performance. Claims for the special education programs were paid without a documented review or
oversight to ensure the expenditures charged to each grant were within the allowed time frame. Although
the reimbursement requests submitted to the IDOE were prepared by the Treasurer and approved by the
Special Education Director, the School Corporation was unable to provide tangible audit evidence of this
review and approval process, which may have included a review of the costs included on each request to
verify they were within the correct period of performance.
The lack of internal controls was isolated to 2021-2022.
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 23
SILVER CREEK SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(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 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.
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 and are adequately documented.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.