Finding Text
FINDING 2023-006
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 Listing Number: 84.010
Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014, S010A200014,
S010A210014, S010A220014
Pass-Through Entity: Indiana Department of Education
Compliance Requirements: Eligibility, Reporting, Special Tests and Provisions -
Assessment System Security
Audit Finding: Material Weakness
Condition and Context
The School Corporation had not properly designed or implemented a system of internal controls,
which would include appropriate segregation of duties, that would likely be effective in preventing, or
detecting and correcting, noncompliance.
Eligibility
Data from the School Corporation's student software system was uploaded to the Indiana
Department of Education's (IDOE) Data Exchange System. Enrollment and poverty information
for the School Corporation was then abstracted by the IDOE from the Data Exchange
System into the Title I application.
The School Corporation had not designed or implemented an oversight or review process to
ensure that the data was accurately uploaded by the IDOE into the Title I application.
Reporting
The School Corporation was required to submit final expenditure reports to the IDOE on or
before December 31, after the September 30 deadline for encumbering prior school year funds.
During the audit period, the School Corporation had final expenditure reports due for the
S010A200014 and the S010A210014 grant awards. A single employee prepared and
submitted the final reports without a documented review or oversight process in place to
prevent, or detect and correct, errors.
Special Tests and Provisions - Assessment System Security
The School Corporation had a process in place to ensure that the assessment system security
policy was reviewed and updated, if applicable, each year per the assessment security
handbook. However, there was no documentation of that process to ensure that the policy was
being reviewed.
The lack of internal controls was systemic 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) . . . ."
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.
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.