Finding Text
FINDING 2024-006
Subject: Title I Grants to Local Educational Agencies - Special Tests and
Provisions - Annual Report/High School Graduation Rate
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): S010A200014, 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: Material Weakness, Modified Opinion
Repeat Finding
This is a repeat finding from the immediately prior audit report. The prior audit finding number was
2022-006.
Condition and Context
An effective internal control system was not designed or implemented at the School Corporation to
ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions
- Annual Report/High School Graduation Rate compliance requirement.
INDIANA STATE BOARD OF ACCOUNTS
28
GARY COMMUNITY SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
The School Corporation must report graduation rate data for all public high schools within the
School Corporation using the four-year adjusted cohort rate. To remove a student from the cohort, the
School Corporation must confirm the reason for removal in writing. Additionally, required documentation
for each removal type must be retained by the School Corporation.
For 24 of 25 students tested, only printouts from the student management software were provided
to substantiate the removal of the students. Supporting documentation was not maintained to support the
removal from the graduation cohort.
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 7801(23)(B) states:
"To remove a student from a cohort, a school or local educational agency shall require
documentation, or obtain documentation 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 is deceased."
Cause
The School Corporation did not have internal controls to ensure required documentation to support
the reason for a student's removal from the high school graduation cohort for mobility reasons was
prepared, reviewed, and retained.
Effect
Noncompliance with the grant agreement and the compliance requirement could result in the repayment
of federal funds.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that the School Corporation's management establish a system of internal
controls and develop policies and procedures over the removal of students from the graduation cohort and
that appropriate reviews, approval, and oversight are taking place to ensure compliance. Additionally,
management should develop policies and procedures to ensure that appropriate documentation is retained
to support the removal of students.
INDIANA STATE BOARD OF ACCOUNTS
29
GARY COMMUNITY SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.