Finding Text
Information on the federal program:
Subject: Education Stabilization Fund - Activities Allowed or Unallowed, Allowable Costs/Cost Principles
Federal Agency: Department of Education
Federal Program: Education Stabilization Fund
Assistance Listing Number: 84.425D, 84.425U, 84.425W
Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013,
S425W210015
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles
Audit Finding: Material Weakness, Other Matters
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 200.430 states in part:
(1) Charges to Federal awards for salaries and wages must be based on records that
accurately reflect the work performed. These records must:
(i) Be supported by a system of internal control which provides reasonable assurance that the charges are
accurate, allowable, and properly allocated;
(ii) Be incorporated into the official records of the non-Federal entity;
(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity,
(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on
an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's
written policy;
(v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph
(h)(1)(ii) above for treatment of incidental work for IHEs.); and
vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if
the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect
cost activity and a direct cost activity; two or more indirect activities which are allocated using different
allocation bases; or an unallowable activity and a direct or indirect cost activity.
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the activities allowed or unallowed
and allowable costs/cost principle compliance requirements. Cause: The School Corporation'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 Corporation 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: $1,426 (Known questioned costs)
Context: For 1 selection, in a sample of 40 payroll transactions, the School Corporation did not have time
and effort logs to support the portion of the employees’ time charged to the grant. The employees’ time was
split with another federal grant; however, the School Corporation did not have support for the allocation of
the time charged to the Education Stabilization Fund grant.
Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior
finding number was 2022-009.
Recommendation: We recommend management ensure semi-annual certifications are completed for all
employees charged to the grant awards at 100% and time and effort logs are maintained for all employees
not charged at 100% to support work performed and charged to the grant awards. We recommend
management establish a documented review by management of semi-annual certifications and time and
effort logs to ensure time charged to grant awards is allowable and allocable based on work performed in
accordance with grant requirements.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.