Finding Text
FINDING 2024-003
Subject: Special Education Cluster (IDEA) - Earmarking
Federal Agency: Indiana Department of Education
Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States,
Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants
Assistance Listings Numbers: 84.027A, 84.027X, 84.173A, 84.173X
Federal Award Numbers and Years (or Other Identifying Numbers): 22611-144-PN01, 22619-144-PN01,
23611-144-PN01, 23619-144-PN01,
22611-144-ARP, 22619-144-ARP
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Matching, Level of Effort, Earmarking
Audit Findings: Material Weakness, Other Matters
Condition and Context
An effective internal control system was not in place at the School Corporation to ensure that the
School Corporation complied with Earmarking compliance requirements. The School Corporation did not
have adequate procedures in place to ensure the required level of expenditures for nonpublic school
students was met.
The School Corporation's payroll-related disbursements for Non-Public Proportionate Share were
estimated based on actual hours worked by School Corporation staff at nonpublic schools in the previous
school year. This amount was allocated over the biweekly salaries of employees providing services at the
nonpublic schools. This resulted in a fixed amount of each biweekly pay being charged to the nonpublic
accounts regardless of actual time spent by employees with nonpublic students in the given pay period.
There was no reconciliation process between budgeted hours and actual hours worked with nonpublic
students during each pay period.
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). . . ."
2 CFR 200.403 states in part:
"Except where otherwise authorized by statute, costs must meet the following general criteria
in order to be allowable under Federal awards:
(g) Be adequately documented. . . ."
INDIANA STATE BOARD OF ACCOUNTS
20
GREENSBURG COMMUNITY SCHOOLS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust
specific Federal award conditions as needed, . . ."
511 IAC 7-34-7(b) states:
"The public agency, in providing special education and related services to students in nonpublic
schools must expend at least an amount that is the same proportion of the public agency total
subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities,
who are enrolled by their parents in nonpublic schools within its boundaries, is to the total
number of students with disabilities of the same age range."
Cause
Management of the School Corporation had not designed a system of internal controls that would
have ensured that time worked by certified staff for nonpublic schools was properly identified. Internal
controls in place did not identify that an improper method was used to identify expenditures for nonpublic
students with disabilities.
Effect
Without the proper implementation of an effectively designed system of internal controls, the School
Corporation was unable to ensure that the proportionate share required to be expended for nonpublic
students was met.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that management of the School Corporation establish a proper system of
internal controls and develop policies and procedures to ensure the Non-Public Proportionate Share
amounts are spent based on actual charged time by staff working with the nonpublic students.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.