Finding Text
FINDING 2023-004
Subject: COVID-19 - Education Stabilization Fund - Reporting
Federal Agency: Department of Education
Federal Program: COVID-19 - Education Stabilization Fund
Assistance Listings Numbers: 84.425D, 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013
S425U210013
Pass-Through Entity: Department of Education
Compliance Requirement: Reporting
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. The School Corporation was required to submit annual data
reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted
included, but was not limited to, current period expenditures, prior period expenditures, and expenditures
per activity.
During the audit period the School Corporation submitted two ESSER I reports, two ESSER II
reports, and two ESSER III reports, for a total of six reports. The annual data reports were complied,
prepared, and submitted by the Assistant Superintendent of Schools and the Treasurer without an oversight
or review process in place to prevent, or detect and correct, errors.
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.
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.
INDIANA STATE BOARD OF ACCOUNTS 21
RANDOLPH EASTERN SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
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 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 prior to filing required reports.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.