Finding Text
Information on the federal program:
Subject: Special Education Cluster – Internal Controls
Federal Agency: Department of Education
Federal Program: Special Education Cluster
Assistance Listing Number: 84.027X
Federal Award Numbers and Years (or Other Identifying Numbers): 22611-122-ARP
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Period of Performance
Audit Finding: Material Weakness
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 200.309 states:
"A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in § 200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity.
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 period of performance compliance requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the period of performance requirement. The School Corporation did not have a design control in place to ensure that service provider invoices were paid before the required liquidation date.
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.
Questioned Costs: There were no questioned costs identified.
Context: The School Corporation pays one hundred percent of its Special Education Cluster funding to one service provider. From review of the expense population, we noted 2 payments to the service provider where the service provider was not paid until after liquidation date of December 29, 2023. The School Corporation did not pay the service provider until April 30, 2024 for $258,488 for the services provided.
Identification as a repeat finding: No.
Recommendation: We recommend the School Corporation implement procedures to ensure the invoices are paid before the required liquidation date.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.