Finding 43490 (2022-007)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2023-09-24

AI Summary

  • Core Issue: Lack of effective internal controls and insufficient supporting documentation for reimbursement requests in Special Education funding.
  • Impacted Requirements: Noncompliance with 2 CFR 200.303 regarding internal control systems and documentation retention.
  • Recommended Follow-Up: Management should establish a robust internal control system to ensure compliance and proper documentation for audits.

Finding Text

FINDING 2022-007 Subject: Special Education Cluster (IDEA) - Reporting 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): 19611-014-PN01, 19619-014-PN01, 20611-014-PN01, 20619-014-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context Reimbursement requests are submitted through the Indiana Department of Education information portal after review by the Executive Director of the Elkhart County Special Education Cooperative and the School Corporation's Treasurer. Supporting documentation was not provided to substantiate the amounts reported on the reimbursement requests. Ledgers provided during the audit were used to determine amounts requested by abstracting the expenses for each Special Education Fund. However, upon testing of the reimbursement requests it was determined that the documentation, or lack thereof, accompanying the reimbursement requests was not sufficient to prevent or detect noncompliance. Therefore, an internal control had not been properly designed and implemented. ? 19611-014-PN01 - Reimbursement request totaled $105,205, and ledger detail provided for audit totaled $110,703, with a variance of $5,498 recorded in the ledger but not requested for reimbursement. ? 20611-014-PN01 - Reimbursement request totaled $638,466, and ledger detail provided for audit totaled $597,441, with a variance of $41,025 over requested on the reimbursement. ? 19619-014-PN01 - Reimbursement request totaled $71,486, and ledger detail provided for audit totaled $69,527, with a variance of $1,959 over requested on the reimbursement. ? 20619-014-PN01 - Reimbursement request totaled $72,589, and ledger detail provided for audit totaled $72,031, with a variance of $558 over requested on the reimbursement. The lack of internal controls, availability of supporting documentation, and noncompliance were systemic issues 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). . . ." 2 CFR 200.207(a) states in part: "The Federal awarding agency or pass-through entity may impose additional specific award conditions as needed, . . ." 2 CFR 200.327 states: "Unless otherwise approved by OMB, the Federal awarding agency may solicit only the standard, OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future collections as may be approved by OMB and listed on the OMB Web site). This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting." Cause Management had not established an effective system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, with the grant agreement and the Reporting compliance requirement. Effect The failure to design and implement an effective internal control system and to retain supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirement listed above. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and to comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Corrective Action Plan

FINDING 2022-007 Contact Person Responsible for Corrective Action: Whitney Dixon, Treasurer Contact Phone Number: 574-533-8631 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: Requests for Reimbursements including supporting documentation, including financial and programmatic records, will be retained for a period no less than three years from the date of submission of the final expenditure report. Reimbursement Requests will be accompanied by supporting documentation to ensure expenditures are from the correct fund. Anticipated Completion Date: May 2023

Categories

Subrecipient Monitoring Reporting Cash Management Material Weakness Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 43470 2022-003
    Material Weakness Repeat
  • 43471 2022-004
    Material Weakness Repeat
  • 43472 2022-003
    Material Weakness Repeat
  • 43473 2022-004
    Material Weakness Repeat
  • 43474 2022-003
    Material Weakness Repeat
  • 43475 2022-004
    Material Weakness Repeat
  • 43476 2022-003
    Material Weakness Repeat
  • 43477 2022-004
    Material Weakness Repeat
  • 43478 2022-003
    Material Weakness Repeat
  • 43479 2022-004
    Material Weakness Repeat
  • 43480 2022-003
    Material Weakness Repeat
  • 43481 2022-004
    Material Weakness Repeat
  • 43482 2022-003
    Material Weakness Repeat
  • 43483 2022-004
    Material Weakness Repeat
  • 43484 2022-003
    Material Weakness Repeat
  • 43485 2022-004
    Material Weakness Repeat
  • 43486 2022-003
    Material Weakness Repeat
  • 43487 2022-004
    Material Weakness Repeat
  • 43488 2022-005
    Material Weakness Repeat
  • 43489 2022-006
    Material Weakness Repeat
  • 43491 2022-005
    Material Weakness Repeat
  • 43492 2022-006
    Material Weakness Repeat
  • 43493 2022-007
    Material Weakness
  • 43494 2022-005
    Material Weakness Repeat
  • 43495 2022-006
    Material Weakness Repeat
  • 43496 2022-007
    Material Weakness
  • 43497 2022-011
    Material Weakness Repeat
  • 43498 2022-011
    Material Weakness Repeat
  • 43499 2022-009
    Material Weakness
  • 43500 2022-010
    Material Weakness
  • 43501 2022-008
    Material Weakness
  • 43502 2022-009
    Material Weakness
  • 43503 2022-008
    Material Weakness
  • 43504 2022-009
    Material Weakness
  • 43505 2022-008
    Material Weakness
  • 43506 2022-009
    Material Weakness
  • 619912 2022-003
    Material Weakness Repeat
  • 619913 2022-004
    Material Weakness Repeat
  • 619914 2022-003
    Material Weakness Repeat
  • 619915 2022-004
    Material Weakness Repeat
  • 619916 2022-003
    Material Weakness Repeat
  • 619917 2022-004
    Material Weakness Repeat
  • 619918 2022-003
    Material Weakness Repeat
  • 619919 2022-004
    Material Weakness Repeat
  • 619920 2022-003
    Material Weakness Repeat
  • 619921 2022-004
    Material Weakness Repeat
  • 619922 2022-003
    Material Weakness Repeat
  • 619923 2022-004
    Material Weakness Repeat
  • 619924 2022-003
    Material Weakness Repeat
  • 619925 2022-004
    Material Weakness Repeat
  • 619926 2022-003
    Material Weakness Repeat
  • 619927 2022-004
    Material Weakness Repeat
  • 619928 2022-003
    Material Weakness Repeat
  • 619929 2022-004
    Material Weakness Repeat
  • 619930 2022-005
    Material Weakness Repeat
  • 619931 2022-006
    Material Weakness Repeat
  • 619932 2022-007
    Material Weakness
  • 619933 2022-005
    Material Weakness Repeat
  • 619934 2022-006
    Material Weakness Repeat
  • 619935 2022-007
    Material Weakness
  • 619936 2022-005
    Material Weakness Repeat
  • 619937 2022-006
    Material Weakness Repeat
  • 619938 2022-007
    Material Weakness
  • 619939 2022-011
    Material Weakness Repeat
  • 619940 2022-011
    Material Weakness Repeat
  • 619941 2022-009
    Material Weakness
  • 619942 2022-010
    Material Weakness
  • 619943 2022-008
    Material Weakness
  • 619944 2022-009
    Material Weakness
  • 619945 2022-008
    Material Weakness
  • 619946 2022-009
    Material Weakness
  • 619947 2022-008
    Material Weakness
  • 619948 2022-009
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.374 Teacher Incentive Fund Fy 2022 $1.90M
84.374 Teacher Incentive Fund Fy 2021 $1.41M
84.425 Education Stabilization Fund Fy 2022 $848,265
84.010 Title I Grants to Local Educational Agencies Fy 2021 $789,944
10.553 School Breakfast Program Fy 2022 $779,613
84.027 Special Education_grants to States Fy 2022 $743,671
10.555 National School Lunch Program Fy 2021 $292,335
84.010 Title I Grants to Local Educational Agencies Fy 2022 $215,048
84.424 Student Support and Academic Enrichment Program Fy 2021 $155,532
84.367 Improving Teacher Quality State Grants Fy 2021 $145,734
10.559 Summer Food Service Program for Children Fy 2022 $139,725
10.559 Summer Food Service Program for Children Fy 2021 $117,188
93.778 Medical Assistance Program Fy 2021 $108,536
10.553 School Breakfast Program Fy 2021 $86,705
10.555 National School Lunch Program Fy 2022 $84,920
84.173 Special Education_preschool Grants Fy 2022 $72,589
84.173 Special Education_preschool Grants Fy 2021 $71,486
93.778 Medical Assistance Program Fy 2022 $67,954
84.367 Improving Teacher Quality State Grants Fy 2022 $67,699
84.425 Education Stabilization Fund Fy 2021 $44,638
84.365 English Language Acquisition State Grants Fy 2021 $25,235
10.649 Pandemic Ebt Administrative Costs Fy 2022 $3,063