Finding 528141 (2024-003)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-03-14

AI Summary

  • Core Issue: The School Corporation failed to properly document and implement a methodology ensuring Title I funds supplement, rather than replace, state and local funding.
  • Impacted Requirements: Noncompliance with federal regulations (2 CFR 200.303 and 20 USC 6321(b)) regarding the allocation of funds and internal controls.
  • Recommended Follow-Up: The School Corporation should establish a clear, documented methodology for fund allocation and retain all supporting documentation for future audits.

Finding Text

FINDING 2024-003 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Supplement Not Supplant 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, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Supplement Not Supplant Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-005. Condition and Context A Local Educational Agency (i.e., School Corporation) may use Part A, Title I funds only to supplement the funds that would, in the absence of the Part A funds, be made available from state and local sources for the education of students participating in a Part A program. Compliance is demonstrated through written procedures which are used to allocate state and local funds to each Title I school while ensuring that the school(s) receives all the state and local funds it would otherwise receive if not receiving Part A funds. The School Corporation had a Title I Services policy [#2261] in place that stated the following: "Title I funds will be used only to augment, not to replace, State and local funds. The Corporation will document its compliance with the supplement not supplant provisions by using a written methodology that ensures State and local funds are allocated to each school on the same basis, regardless of whether a school receives Title I funding." The written methodology referred to in the School Corporation's policy is to be a part of each Title I application. During the audit period, there were three Title I applications. One of the three applicable grant year applications included information in the supplement, not supplant section. The other two applications were blank for this section. For the one application, the 2022 grant year application, with information in the supplement, not supplant section, the methodology documented indicated that the Director of Business Affairs was to use Form 9 data on a per pupil expenditure basis as to ensure schools received all the state and local funds they would otherwise receive if not receiving Part A funds. Documentation of the calculations and the per pupil expenditure comparisons were not provided for audit. Additionally, the Indiana Department of Education (IDOE) monitors compliance with this requirement using Comparability Reports, which compare Full-Time Equivalent (FTE) staff positions for Title I schools to FTE staff positions for non-Title I schools within the School Corporation. Although the IDOE determined that FTE staff positions were comparable in the 2022, 2023, and 2024 Comparability reports, the School Corporation was unable to provide supporting documentation for the FTE staff numbers reported to the IDOE. The lack of internal controls and noncompliance were systemic issues 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). . . ." 20 USC 6321(b) states in part: "Federal funds to supplement, not supplant, non-Federal funds (1) In general A State educational agency or local educational agency shall use Federal funds received under this part only to supplement the funds that would, in the absence of such Federal funds, be made available from State and local sources for the education of students participating in programs assisted under this part, and not to supplant such funds. (2) Compliance To demonstrate compliance with paragraph (1), a local educational agency shall demonstrate that the methodology used to allocate State and local funds to each school receiving assistance under this part ensures that such school receives all of the State and local funds it would otherwise receive if it were not receiving assistance under this part . . ." Cause Management had not developed a consistent, testable methodology related to this requirement as required by the School Corporation's policy. Additionally, the School Corporation officials did not retain staff listings for audit to support the FTE staff figures reported to the IDOE on the School Corporation's Comparability Reports related to the grant. The School Corporation's new Title I Director had not verified that a documented methodology was in place, and compliance with the requirement was being monitored. Effect A school within the School Corporation may not have received all the state and local funds it should have received. Continued noncompliance could result in the loss of future federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation adopt and document an acceptable methodology to allocate state and local funds to schools. In addition, we recommended the calculation of such methodology and any other supporting documentation be retained for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Corrective Action Plan

FINDING 2024-003 Finding Subject: Title I Grants to Local Educational Agencies – Special Tests & Provisions – Supplement Not Supplant Summary of Finding: During the Audit period, there were three Title I applications. One of the three applicable grant year applications included information in the supplement, not supplant section. The other two applications were blank for this section. Documentation of the calculations and per pupil expenditure comparisons were not provided for the audit. Additionally, the Indiana Department of Education (IDOE) monitors compliance with this requirement using Comparability Reports, which compare Full-Time Equivalent (FTE) staff positions for Title I schools to FTE staff positions for non-Title I schools within the school corporation. Although IDOE determined that FTE staff positions were comparable in the 2022, 2023, and 2024 Comparability reports, the school corporation was unable to provide supporting documentation for the FTE staff numbers reported to IDOE. It is recommended that the school corporation adopt and document an acceptable methodology to allocate State and local funds to schools. In addition, it is recommended the calculation of such methodology and any other supporting documentation be retained for audit. Contact Person Responsible for Corrective Action: John Szabo, Director of Business Affairs Contact Phone Number and Email Address: (812) 443-4461 / szaboj@clay.k12.in.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: Title I Grant Coordinator, currently Dr. Brady Scott, will monitor this requirement using Comparability reports, as an option considered by the Indiana Department of Education (IDOE). In doing so, the Grant Coordinator will complete a list of FTE staff positions for each Title I school, as well as non-Title I school according to the methodology designed for school corporations as communicated by the IDOE. The Grant Coordinator will confer with the corporation Payroll Specialist (currently Mary Mershon) to ensure accuracy of the data used to complete the reporting, and both the Grant Coordinator and the Director of Business Affairs will maintain a record of the data used to complete the report. Anticipated Completion Date: July 2025

Categories

Special Tests & Provisions Subrecipient Monitoring Material Weakness Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 528139 2024-001
    Material Weakness Repeat
  • 528140 2024-002
    Material Weakness Repeat
  • 528142 2024-001
    Material Weakness Repeat
  • 528143 2024-002
    Material Weakness Repeat
  • 528144 2024-003
    Material Weakness Repeat
  • 528145 2024-004
    Material Weakness Repeat
  • 528146 2024-005
    Material Weakness
  • 528147 2024-004
    Material Weakness Repeat
  • 528148 2024-005
    Material Weakness
  • 528149 2024-004
    Material Weakness Repeat
  • 528150 2024-005
    Material Weakness
  • 528151 2024-004
    Material Weakness Repeat
  • 528152 2024-005
    Material Weakness
  • 528153 2024-004
    Material Weakness Repeat
  • 528154 2024-005
    Material Weakness
  • 528155 2024-004
    Material Weakness Repeat
  • 528156 2024-005
    Material Weakness
  • 1104581 2024-001
    Material Weakness Repeat
  • 1104582 2024-002
    Material Weakness Repeat
  • 1104583 2024-003
    Material Weakness Repeat
  • 1104584 2024-001
    Material Weakness Repeat
  • 1104585 2024-002
    Material Weakness Repeat
  • 1104586 2024-003
    Material Weakness Repeat
  • 1104587 2024-004
    Material Weakness Repeat
  • 1104588 2024-005
    Material Weakness
  • 1104589 2024-004
    Material Weakness Repeat
  • 1104590 2024-005
    Material Weakness
  • 1104591 2024-004
    Material Weakness Repeat
  • 1104592 2024-005
    Material Weakness
  • 1104593 2024-004
    Material Weakness Repeat
  • 1104594 2024-005
    Material Weakness
  • 1104595 2024-004
    Material Weakness Repeat
  • 1104596 2024-005
    Material Weakness
  • 1104597 2024-004
    Material Weakness Repeat
  • 1104598 2024-005
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund 2023 $2.97M
84.425 Education Stabilization Fund 2024 $2.73M
10.555 National School Lunch Program 2023 $1.87M
10.555 National School Lunch Program 2024 $1.86M
84.010 Title I Grants to Local Educational Agencies 2024 $1.20M
84.027 Special Education Grants to States 2023 $1.10M
84.010 Title I Grants to Local Educational Agencies 2023 $907,836
10.553 School Breakfast Program 2023 $641,429
10.553 School Breakfast Program 2024 $597,006
84.027 Special Education Grants to States 2024 $204,865
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) 2024 $154,369
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) 2023 $114,081
84.424 Student Support and Academic Enrichment Program 2024 $79,170
84.358 Rural Education 2023 $71,369
84.424 Student Support and Academic Enrichment Program 2023 $51,976
84.002 Adult Education - Basic Grants to States 2024 $34,906
84.358 Rural Education 2024 $34,866
84.002 Adult Education - Basic Grants to States 2023 $34,855
84.173 Special Education Preschool Grants 2023 $33,476
84.048 Career and Technical Education -- Basic Grants to States 2023 $29,956
84.048 Career and Technical Education -- Basic Grants to States 2024 $28,158
84.173 Special Education Preschool Grants 2024 $15,452