Finding Text
FINDING 2024-003
Subject: Emergency Connectivity Fund Program - Equipment and Real Property
Management, Special Tests and Provisions - Restricted Purpose
Federal Agency: Federal Communications Commission
Federal Program: Emergency Connectivity Fund Program
Assistance Listings Number: 32.009
Federal Award Number and Year (or Other Identifying Number): FY 2022
Compliance Requirements: Equipment and Real Property Management, Special
Tests and Provisions - Restricted Purpose
Audit Findings: Material Weakness, Modified Opinion
Condition and Context
The School Corporation had not properly designed or implemented a system of internal controls
that would likely be effective in preventing, or detecting and correcting, noncompliance. The School
Corporation purchased iPads and Wi-Fi hotspots during the audit period with Emergency Connectivity Fund
Program grant monies to meet the remote learning needs of students or staff who would otherwise lack
access to connected devices and or broadband connections sufficient to engage in remote learning.
The School Corporation had established an internal control over the distribution of iPads but did
not establish an internal control over the distribution of Wi-Fi hotspots. The School Corporation was unable
to provide a listing of all students or staff who were provided with Wi-Fi hotspots or an inventory record of
all Wi-Fi hotspots distributed to students. Additionally, the School Corporation did not maintain appropriate
inventory records over the Wi-Fi hotspots.
The School Corporation could not verify that they were only reimbursed for no more than one
Wi-Fi hotspot per student or school staff member. The total noncompliance was limited to Wi-Fi hotspot
expenditures of $105,640.
The lack of internal controls and noncompliance for Wi-Fi hotspots was systemic issues throughout
the audit period.
INDIANA STATE BOARD OF ACCOUNTS
20
NEW PRAIRIE UNITED SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
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). . . ."
2 CFR 200.313(d) states in part:
". . .
(1) Property records must be maintained that include a description of the property, a serial
number or other identification number, the source of funding for the property (including
the FAIN), who holds title, the acquisition date, and cost of the property, percentage
of Federal participation in the project costs for the Federal award under which the
property was acquired, the location, use and condition of the property, and any
ultimate disposition data including the date of disposal and sale price of the property.
(2) A physical inventory of the property must be taken and the results reconciled with the
property records at least once every two years.
(3) A control system must be developed to ensure adequate safeguards to prevent loss,
damage, or theft of the property. Any loss, damage, or theft must be investigated.
(4) Adequate maintenance procedures must be developed to keep the property in good
condition. . . ."
47 CFR 54.1706(c) states:
"Emergency Connectivity Fund support for eligible equipment and services is limited to no more
than one fixed broadband internet access connection per location, and one connected device
and one Wi-Fi hotspot device per student, school staff member, or library patron. For purposes
of the per-location limitation imposed on fixed broadband internet access services in this
paragraph (c), each unit in a multi-tenant environment is a separate location for purposes of
this paragraph (c)."
Cause
The service provider had a record of the Wi-Fi hotspots; however, the hotspots were not identifiable
by student.
Effect
The failure to establish an effective internal control system for Wi-Fi hotspots enabled noncompliance
to go undetected. Noncompliance with the grant agreement for the Equipment and Real Property
Management and the Special Tests and Provisions - Restricted Purpose compliance requirements could
result in the repayment of federal funds
INDIANA STATE BOARD OF ACCOUNTS 21
NEW PRAIRIE UNITED SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
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 compliance requirements for
the Equipment and Real Property Management and the Special Test and Provisions - Restricted Purpose.
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.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.