Finding Text
Information on the federal program:
Subject: Education Stabilization Fund - Activities Allowed or Unallowed, Allowable Costs/Cost Principles
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: Activities Allowed or Unallowed, Allowable Costs/Cost Principles
Audit Finding: Material Weakness, Material Noncompliance, Qualified Opinion
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 in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles requirements.
Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation.
Questioned Costs: $13,779 (Known) for payroll charged for people who have issues in one or both of the items noted below.
Context: During testing we noted the following issues in a sample of forty ESSER payroll transactions:
• 30 of 40 payroll transactions where a timecard was not completed by the employee to validate their hours worked and the time charged to the grant.
• 26 of 40 payroll transactions where the School Corporation was unable to provide supporting documentation for approval of the hourly rate paid or the contracted salaried amount paid to employee.
Management stated the noncompliance was due to turnover in the Corporation personnel and the inability to find supporting records from prior fiscal years.