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FINDING 2022-006Subject: Title I Grants to Local Educational Agencies - EligibilityFederal Agency: Department of EducationFederal Program: Title I Grants to Local Educational AgenciesAssistance Listings Number: 84.010Federal Award Numbers and Years (or Other Identifying Numbers): FY18, FY19, FY20, FY21Pass-Through Entity: Indiana Department of EducationCompliance Requirement: EligibilityAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not in place at the School Corporation to ensurecompliance with requirements related to the grant agreement and the Eligibility compliance requirement.Eligibility for Title I funding for the School Corporation was determined through the Textbook RentalApplication process. During the audit period, one employee entered the determinations in the SchoolDistrict's software system by uploading Direct Certification reports from the state or manually enteringTextbook Rental Assistance Applications into the software system. There was not a documented oversightor review process in place to prevent, or detect and correct, errors.The lack of internal controls was a systemic issue throughout the audit period.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). . . ."INDIANA STATE BOARD OF ACCOUNTS26BLACKFORD COUNTY SCHOOLSSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)CauseManagement had not designed or implemented an effective system of internal controls that wouldhave ensured compliance with the grant agreement and the Eligibility compliance requirement.EffectThe failure to establish an effective system of internal controls placed the School Corporation atrisk of noncompliance with the grant agreement and the Eligibility compliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controlsto ensure compliance with the grant agreement and the Eligibility compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.