Finding Text
FINDING 2024-001
Subject: Title I Grants to Local Educational Agencies - Eligibility
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
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Findings: Material Weakness, Modified Opinion
INDIANA STATE BOARD OF ACCOUNTS
17
SOUTH HARRISON COMMUNITY SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Condition and Context
The School Corporation had not properly designed or implemented a system of internal controls
that would likely be effective in preventing, or detecting and correcting, noncompliance related to the
enrollment and poverty data as reported by the School Corporation in its Title I applications.
Enrollment and poverty numbers for nonpublic schools were entered manually into the Title I
applications by the School Corporation. The School Corporation established a process to receive and
review the listing of students from the nonpublic schools for enrollment and poverty counts to be entered in
the application. The application is reviewed by the Title I Director and Director of Business
Operations/Treasurer. However, the internal controls were ineffective as the School Corporation was
unable to provide detailed support from the nonpublic school for the information reported in the grant
applications. Therefore, we were unable to determine if the enrolled student count in the applications were
accurate.
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). . . ."
34 CFR 200.78(a)(1) states:
"After reserving funds, as applicable, under § 200.77, including funds for equitable services for
private school students, their teachers, and their families, an LEA must allocate funds under
this subpart to school attendance areas and schools, identified as eligible and selected to
participate under section 1113(a) or (b) of the ESEA, in rank order on the basis of the total
number of public school children from low-income families in each area or school."
Cause
The School Corporation did not maintain appropriate documentation from the nonpublic school
corporation related to the applications for grant years 2022 or 2023. The School Corporation compiled a
spreadsheet containing the nonpublic school information for both applications. The School Corporation
stated that when preparing the spreadsheet for the 2023 application, the data for the prior year 2022
application was overridden without saving a copy. The School Corporation was unable to reproduce this
information for review. The School Corporation also stated that due to staff changeover at one of the
nonpublic schools, the School Corporation had difficulty obtaining accurate data and received information
both verbally and via email multiple times from the nonpublic school. The data in the application did not
agree to the information contained in the School Corporation's spreadsheet, and the School Corporation
was unable to provide additional documentation supporting the data in the application.
INDIANA STATE BOARD OF ACCOUNTS
18
SOUTH HARRISON COMMUNITY SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Effect
Without a proper system of internal controls in place that operated effectively, the School
Corporation did not properly maintain supporting documentation for the nonpublic schools' enrollment and
poverty data reported in its Title I applications. Accordingly, the Indiana State Board of Accounts was
unable to verify that this information was accurate to determine if the School Corporation complied with the
Eligibility compliance requirement. Noncompliance with the provisions of federal statues, regulations, and
the terms and conditions of the federal award could result in the loss of future federal funds to the School
Corporation.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that the School Corporation's management establish a proper system of internal
controls and strengthen its procedures to ensure all supporting documentation is maintained for future grant
years.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.