Finding Text
FINDING 2024-004
Subject: Title I Grants to Local Educational Agencies - Special Tests and
Provisions - Annual Report Card, 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): S010A210014, S010A220014,
S010A230014
Pass-Through Entity: Indiana Department of Education
Compliance Requirements: Special Tests and Provisions - Annual Report
Card, High School Graduation Rate
Audit Finding: Material Weakness
Repeat Finding
This is a repeat finding from the immediately prior audit report. The prior audit finding number was
2022-003.
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 Card, High School Graduation Rate compliance requirement until the fiscal year
2023-2024.
The School Corporation had not established internal controls for most of the audit period to ensure
that the required documentation to remove a student from a cohort was confirmed and maintained with the
withdrawal forms prior to removing the student from the cohort. Starting in 2023-2024, the building principal
now signs off on the supporting documentation that is being retained to support a student's withdrawal from
the cohort.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
INDIANA STATE BOARD OF ACCOUNTS
20
SCOTT COUNTY SCHOOL DISTRICT 1
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
(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
The School Corporation's management had not designed or implemented a system of internal
controls that would have ensured compliance with the grant agreement and the Special Tests and
Provisions - Annual Report Card, High School Graduation Rate compliance requirement until
2023-2024. Prior to 2023-2024, no one was verifying that the appropriate documentation was being
retained to support removing a student from the cohort.
Effect
The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the Special Tests and Provisions - Annual Report Card, High
School Graduation Rate compliance requirement. Noncompliance could result in students being improperly
removed from the cohort.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that the School Corporation's management continue to implement the system
of internal controls that was designed during 2023-2024 to ensure compliance with the Special Tests and
Provisions - Annual Report Card, High School Graduation Rate compliance requirement.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.