Finding Text
Information on the federal program:
Subject: Education Stabilization Fund (ESSER) – Internal Controls
Federal Agency: Department of Education
Federal Program: COVID-19 – Education Stabilization Fund
Assistance Listing Number: 84.425D, 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
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). . . ."
Condition: An effective internal control system was not in place at the School Corporation to ensure
compliance with requirements related to the grant agreement and the reporting compliance requirements.
The School Corporation was not formally reviewing the ESSER reports being submitted by comparing the
underlying expenditure detail to the amounts reported for each grant for the reporting period.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with the reporting requirements.
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. A lack of a formal internal
control system and procedures could have also allowed noncompliance with the compliance requirements
and allowed mismanagement of federal funds.
Questioned Costs: There were no questioned costs.
Context: The School Corporation was required to submit six Annual Data Reports to the Indiana
Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER
grant awards. Crowe noted the following reporting errors for the Year 3 reports (July 1, 2021 through June
30, 2022). The ESSER II amount reported on the Year 3 report ($585,040) did not agree to the underlying
expenditure records ($581,468). This is the exact amount reported as the SEA reserve amount on the
Annual Data Report. Crowe noted the ESSER III amount reported on the Year 3 report ($0) did not agree
to the underlying expenditure records ($351,831).
Crowe noted the following reporting error for the Year 4 reports (July 1, 2022 through June 30, 2023). The
ESSER III amount reported on the Year 4 report ($1,062,765) did not agree to the underlying expenditure
records ($1,054,618). This is the exact amount reported as the SEA reserve amount on the Annual Data
Report.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommended that the School Corporation's management establish a system of
internal controls related to the reporting compliance requirements. We recommend that management attach
the expenditure detail to each Annual Data Report, so that the reviewer can easily decipher what
expenditure detail makes up the amounts reported on the Annual Data Report for each ESSER report
submitted.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.