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,
S010A230014
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness
INDIANA STATE BOARD OF ACCOUNTS
13
SOUTH DEARBORN COMMUNITY SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Condition and Context
An effective internal control system, which would include segregation of duties, 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.
Eligibility for Title I is determined on the Eligible School Summary of the Title I application.
Enrollment and Poverty numbers are automatically pulled from the Indiana Department of Education's
Official Pupil Enrollment (PE) count for each school into the Eligible School Summary page of the Title I
application. These counts that are prepopulated should be based on the School Corporation's records as
of October of the prior fiscal year. There was no documented review by the School Corporation of the
enrollment and poverty counts that were prepopulated into the School Corporation's Title I application.
Enrollment and poverty numbers for any nonpublic schools are manually entered into the application
by the School Corporation. The School Corporation had not established an effective process to
review the listing of students from the nonpublic schools for enrollment and poverty counts to be entered
into the Title I application and to retain this information for audit.
The lack of internal controls was a systemic issue 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). . . ."
Cause
A proper system of internal controls was not designed by management of the School Corporation,
which would include segregation of key functions, to ensure that the review of records pertinent to the
federal award was properly documented and retained for audit. After a change in the Director of the federal
program, information from the previous Director could not be located for audit, so there was no documentation
presented that an internal control over Eligibility was implemented.
Effect
Without the proper implementation of an effectively designed system of internal controls, errors in
the enrollment and poverty information reported in the Title I application could remain undetected and
uncorrected. Uncorrected errors could result in an incorrect determination of eligibility or ranking of Title I
schools.
Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of
the federal award, could result in the loss of future federal funding to the School Corporation.
INDIANA STATE BOARD OF ACCOUNTS 14
SOUTH DEARBORN COMMUNITY SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that the School Corporation's management establish a system of internal
controls, including segregation of duties, related to the grant agreement and compliance requirement listed
above.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.