Finding 443061 (2022-003)

Material Weakness
Requirement
G
Questioned Costs
-
Year
2022
Accepted
2023-03-13

AI Summary

  • Core Issue: The School Corporation lacked an effective internal control system to ensure compliance with federal grant requirements, particularly regarding earmarking for non-public students with disabilities.
  • Impacted Requirements: Noncompliance with 2 CFR 200.303 and 511 IAC 7-34-7(b) could lead to potential loss of federal funding.
  • Recommended Follow-Up: Management should implement a robust internal control system and ensure proper documentation of federal expenditures to meet compliance standards.

Finding Text

FINDING 2022-003Subject: Special Education Cluster (IDEA) - EarmarkingFederal Agency: Department of EducationFederal Program: Special Education Grants to StatesAssistance Listings Number: 84.027Federal Award Number and Year (or Other Identifying Numbers): 20611-115-PN01Pass-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 earmarking requirements of the Matching,Level of Effort, Earmarking, compliance requirement.The School Corporation did not have adequate procedures in place to ensure that the requiredlevel of expenditures for non-public students with disabilities was met for all grants that ended or were fullyexpended during the audit period. For one of three grants tested, the Non-Public Proportionate Shareexpenditures could not be verified. Additionally, a waiver was not requested.The lack of internal controls and noncompliance were isolated to the 20611-115-PN01 grant award.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 200.403 states in part:"Except where otherwise authorized by statute, costs must meet the following general criteriain order to be allowable under Federal awards: . . .(g) Be adequately documented. . . ."2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjustspecific Federal award conditions as needed . . ."511 IAC 7-34-7(b) states:"The public agency, in providing special education and related services to students in nonpublicschools must expend at least an amount that is the same proportion of the public agency totalsubgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities,who are enrolled by their parents in nonpublic schools within its boundaries, is to the totalnumber of students with disabilities of the same age range."CauseManagement had not developed an effective system of internal controls that would have ensuredcompliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort,Earmarking compliance requirement.EffectThe failure to establish an effective internal control system enabled noncompliance to go undetected.Noncompliance with the grant agreement and the earmarking requirements of the Matching, Levelof Effort, Earmarking compliance requirement could result in the loss of future federal funds to the SchoolCorporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internalcontrols, as well as appropriately document and identify federal award expenditures to ensure compliancewith 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.

Corrective Action Plan

FINDING 2022-003Contact People Responsible for Corrective Action: Lynn Leininger, Business Manager and AllisonKellogg, Director of Special EducationContact Phone Number: (260) 367-3677Whitko Community Schools concurs with the finding and will implement a dual check system with theBusiness Manager and the Director of Special Education. All proportionate money earmarked fornonpublic school expenditures under the Special Education Cluster will be continually monitored from theapproval through the end of the grant to insure all compliance requirements are met.The completion date for this corrective action will be July 1, 2023.

Categories

Matching / Level of Effort / Earmarking Allowable Costs / Cost Principles

Other Findings in this Audit

  • 443062 2022-004
    Material Weakness Repeat
  • 443063 2022-004
    Material Weakness Repeat
  • 443064 2022-005
    Material Weakness
  • 443065 2022-005
    Material Weakness
  • 443066 2022-005
    Material Weakness
  • 443067 2022-005
    Material Weakness
  • 1019503 2022-003
    Material Weakness
  • 1019504 2022-004
    Material Weakness Repeat
  • 1019505 2022-004
    Material Weakness Repeat
  • 1019506 2022-005
    Material Weakness
  • 1019507 2022-005
    Material Weakness
  • 1019508 2022-005
    Material Weakness
  • 1019509 2022-005
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund 22 $494,935
10.555 National School Lunch Program 22 $466,182
84.027 Special Education_grants to States 22 $371,142
84.027 Special Education_grants to States 21 $360,469
84.010 Title I Grants to Local Educational Agencies 21 $298,660
84.010 Title I Grants to Local Educational Agencies 22 $289,122
84.425 Education Stabilization Fund 21 $115,715
10.553 School Breakfast Program 22 $101,332
84.424 Student Support and Academic Enrichment Program 22 $64,471
93.778 Medical Assistance Program 21 $52,796
84.013 Title I State Agency Program for Neglected and Delinquent Children and Youth 22 $49,813
84.367 Improving Teacher Quality State Grants 21 $49,361
93.575 Child Care and Development Block Grant 22 $44,216
84.367 Improving Teacher Quality State Grants 22 $43,140
10.555 National School Lunch Program 21 $40,716
84.048 Career and Technical Education -- Basic Grants to States 22 $26,715
84.424 Student Support and Academic Enrichment Program 21 $17,288
84.013 Title I State Agency Program for Neglected and Delinquent Children and Youth 21 $15,416
84.173 Special Education_preschool Grants 22 $14,909
93.778 Medical Assistance Program 22 $12,364
84.173 Special Education_preschool Grants 21 $8,405
10.553 School Breakfast Program 21 $7,932
84.365 English Language Acquisition State Grants 22 $4,917
84.365 English Language Acquisition State Grants 21 $795
10.649 Pandemic Ebt Administrative Costs 22 $614