Finding Text
FINDING 2022-007Subject: Title I Grants to Local Education Agencies - EarmarkingFederal Agency: Department of EducationFederal Program: Title I Grants to Local Educational AgenciesAssistance Listings Number: 84.010Federal Award Numbers and Years (or Other Identifying Numbers): FY19, FY 20Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Matching, Level of Effort, EarmarkingAudit Findings: Material Weakness, Other MattersCondition and ContextAn effective internal control system was not in place at the School Corporation to ensure compliancewith requirements related to the grant agreement and the Matching, Level of Effort, Earmarkingcompliance requirement.Officials of the School Corporation did not properly monitor the Homeless set-aside to ensureamounts were tracked for those students designated as homeless. For the Title I grant years FY19 andFY20, the entire Homeless set-aside of $1,632 and $550, respectively, was not spent. In addition, the setasideswere not carried forward for subsequent year expenses.The lack of internal controls and noncompliance were systemic issues throughout the audit period.INDIANA STATE BOARD OF ACCOUNTS27BLACKFORD COUNTY SCHOOLSSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Criteria2 CFR 200.303 states in part:"The Non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.400 states in part:"(a) The non-Federal entity is responsible for the efficient and effective administration of theFederal award through the application of sound management practices.(b) The non-Federal entity assumes responsibility for administering Federal funds in a mannerconsistent with underlying agreements, program objectives, and the terms and conditions ofthe Federal award. . . ."20 USC 6313(c)(3) states in part:"(A) In General. A local educational agency shall reserve such funds as are necessary underthis part, determined in accordance with subparagraphs (B) and (C), to provide servicescomparable to those provided to children in schools funded under this part to serve?(i) homeless children and youths, including providing educationally related supportservices to children in shelters and other locations where children may live;(ii) children in local institutions for neglected children; and(iii) if appropriate, children in local institutions for delinquent children, and neglected ordelinquent children in community day programs. . . .(C) Homeless children and youths. Funds reserved under subparagraph (A)(i) may be? . . .(ii) used to provide homeless children and youths with services not ordinarily provided toother students under this part, including providing?(I) funding for the liaison designated pursuant to section 11432(g)(1)(J)(ii) of title 42;and(II) transportation pursuant to section 11432(g)(1)(J)(iii) of such title."CauseManagement had not established an effective system of internal controls that would have ensuredcompliance with the grant agreement and the Matching, Level of Effort, Earmarking compliance requirement.INDIANA STATE BOARD OF ACCOUNTS28BLACKFORD COUNTY SCHOOLSSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)EffectThe failure to establish an effective system of internal controls enabled noncompliance to go undetected.Noncompliance with the grant agreement and the Matching, Level of Effort, Earmarking compliancerequirement could result in the loss of future federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls related tothe grant agreement and the Matching, Level of Effort, Earmarking compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.