Finding 526382 (2024-002)

Information on the federal program: Subject: Title I Grants to Local Educational Agencies – Special Tests and Provisions – Annual Report Card, High School Graduation Rate Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010A Federal Award Numbers: S010A210014, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions – Annual Report Card, High School Graduation Rate Audit Findings: Significant Deficiency 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 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)...." 20 USC 7801(23)(B) states: "To remove a student from a cohort, a school or local educational agency shall require documentation, or obtain information from the State educational agency, to confirm that the student has transferred out, emigrated to another country, or transferred to a prison or juvenile facility, or deceased." 2 CFR 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient..." 2 CFR 200.334 (Revised Uniform Guidance) states in part: “Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions - Annual Report Card, High School Graduation Rate compliance requirement. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Cause: Management had not developed nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Special Tests and Provisions compliance requirement. Effect: The failure to establish an effective internal control system could enable noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions – Annual Report Card, High School Graduation Rate compliance requirement could result in loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions - Annual Report Card, High School Graduation Rate compliance requirement. There was no formal documented review of mobility reports in Skyward during our audit period. Identification as a repeat finding: This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Recommendation: We recommended that the School Corporation's management establish an effective system of internal control to ensure compliance and comply with the grant agreement and the Special Tests and Provisions - Annual Report Card, High School Graduation Rate compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.