Finding Text
FINDING 2024-008
Subject: Title I Grants to Local Educational Agencies - Matching, Level of Effort, Earmarking
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: Matching, Level of Effort, Earmarking
Audit Finding: Significant Deficiency
Repeat Finding
This is a repeat finding from the immediately prior audit report. The prior audit finding number was
2022-005.
Condition and Context
An effective internal control system was not designed or implemented at the School Corporation to
ensure compliance with the Matching, Level of Effort, and Earmarking compliance requirement.
The financial information submitted by the School Corporation to the Indiana Department of
Education through the Form 9 report was used to calculate the School Corporation's Level of Effort -
Maintenance of Effort.
Management had not developed an oversight or review process to ensure that all payroll expenditure
data used to complete the Form 9 report was reported accurately in the correct fund, account, and
object code. An internal control process was in place for the payroll expenditures accounted for in grant
funds handled by the Title I office, but not for other payroll expenditures of the School Corporation.
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). . . ."
Cause
Management had not developed an oversight or review process to ensure that all payroll
expenditure data used to complete the Form 9 report was reported accurately in the correct fund,
account, and object code.
INDIANA STATE BOARD OF ACCOUNTS 32
GARY COMMUNITY SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Effect
The failure to design or implement a system of internal controls places the School Corporation at
risk of noncompliance with the grant agreement and the compliance requirement.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that the School Corporation's management design and implement a proper
system of internal controls that would ensure that the appropriate reviews, approvals, and oversight are
documented.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.