Finding Text
FINDING 2024-003
Information on the federal program:
Subject: COVID-19 – Education Stabilization Fund – Reporting
Federal Agency: Department of Education
Federal Program: COVID-19 – Education Stabilization Fund
Assistance Listing Number: 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
Audit Finding: Material Weakness
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards 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 200.302(b) states in part:
"The financial management system of each non-Federal entity must provide for the following:
(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in
accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ."
34 CFR 76.722 states:
"A State may require a subgrantee to submit reports in a manner and format that assists the State in
complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the
program."
Condition: An effective internal control system was not in place at the School District in order to ensure
compliance with requirements related to the grant agreement and the Reporting compliance requirements.
Cause: The School District's management had not developed a system of internal controls to ensure
compliance with the compliance requirements listed above.
Effect: The failure to establish an effective internal control system placed the School District at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There were no questioned costs identified.
Context: The School Corporation had not designed nor implemented a system of internal control to ensure
that the annual Elementary and Secondary School Emergency Relief (ESSER) annual Data Collection
reports (Reports) were complete and accurately submitted. The reports were prepared and submitted in
JotForm, the online application used by the Indiana Department of Education to collect information, without
an oversight or secondary review process in place to prevent, or detect and correct, errors. During tie out
of the Year 3 report, a variance between the underlying records and reported expenditures of $187,649
was noted due to the lack of effective controls surrounding annual data reporting. 84.425U expenditures
submitted within the Year 3 report were overstated by $187,649.
Identification as a repeat finding: Yes, see Finding 2022-001.
Recommendation: We recommend someone other than the preparer of the report perform a documented,
secondary review of the report information prior to submission to validate the accuracy and completeness
of the data submitted.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.