Finding 523549 (2024-002)

FINDING 2024-002 Subject: Title I Grants to Local Educational Agencies - Eligibility Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A210014, S010A230014, S010A220014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Condition and Context The School Corporation submits the October Real Time Data (RT) report each year to the Indiana Department of Education. This data is used to report the School Corporation's enrollment and poverty (socioeconomic) status of the students enrolled in each school. The annual Pupil Enrollment count is a compilation of data from all RT and Enrollment and Mobility reports, for public and non-public schools respectively, which then becomes the official enrollment count for each school. This compiled data populates the socioeconomic status counts on the Eligible School Summary of the Title I applications for the School Corporation, which determines group eligibility for the program. The School Corporation had not designed or implemented a system of internal controls that included an oversight or review process to prevent or detect student socioeconomic status count errors on the Eligible School Summary of the Title I applications for the School Corporation. The lack of internal controls was a systemic issue that occurred 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). . . ." Cause The socioeconomic status counts on the Eligible School Summary of the Title I application were prepopulated and, as such, the grant specialist believed the data was correct and did not perform a review to ensure its accuracy. Effect Without a proper review of the data, the socioeconomic counts in the Title I application could be incorrect. Incorrect data in the Title I application could lead to an incorrect determination of Title I eligibility. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls, including segregation of duties, related to the grant agreement and the eligibility compliance requirements. An internal control system, including segregation of duties, should be designed and operate effectively to provide reasonable assurance that material noncompliance with the grant agreement or a compliance requirement of a federal program will be prevented, or detected and corrected, on a timely basis. In order to have an effective internal control system, it is important to have proper segregation of duties. This is accomplished by making sure proper oversight, reviews, and approvals take place and to have a separation of functions over certain activities related to the program. The fundamental premise of segregation of duties is that an individual or small group of individuals should not be in a position to initiate, approve, undertake, and review the same activity. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.