Finding Text
FINDING 2024-002
Subject: Special Education Cluster (IDEA) - Earmarking
Federal Agency: Department of Education
Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States,
COVID-19 - Special Education Preschool Grants
Assistance Listings Numbers: 84.027, 84.027X, 84.173X
Federal Award Numbers and Years (or Other Identifying Numbers): 22611-168-PN01, 22611-168-ARP,
22619-168-ARP
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Matching, Level of Effort, Earmarking
Audit Findings: Material Weakness, Other Matters
Condition and Context
The School Corporation did not have adequate procedures in place to ensure that the required
level of expenditures for nonpublic school students with disabilities was met for each school. Although the
Proportionate Share Report was prepared by the Treasurer and reviewed and approved by the Special
Education Director, the internal controls were not effective to ensure nonpublic school expenditures were
appropriately identified and reported.
INDIANA STATE BOARD OF ACCOUNTS 16
METROPOLITAN SCHOOL DISTRICT OF NORTH POSEY COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
During fiscal years 2022-2023 and 2023-2024, the School Corporation was responsible for
ensuring and providing oversight of the Special Education Cluster. However, there was inadequate
oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of
Effort, Earmarking compliance requirement. Although the School Corporation has a separate object code
to identify expenditures for the purpose of proportionate share, the money spent from that object code was
less than the total required amount for the Non-Public Proportionate Share per their grant agreements for
22611-168-PN01, 22611-168-ARP, and 22619-168-ARP by $3,499, $5,846, and $8, respectively. The
minimum earmarking requirement for the 22611-168-PN01, 22611-168-ARP, and 22619-168-ARP grant
awards were $16,570, $5,846, and $679, respectively. Additionally, the School Corporation did not obtain
a waiver from the Indiana Department of Education for the amount unspent for the requirement on the grant
awards.
The lack of internal controls and noncompliance were isolated to the 22611-168-PN01,
22611-168-ARP, and 22619-168-ARP grant awards.
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 200.208(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
The Treasurer and the Special Education Director were both new to their positions and did not fully
understand the required level of expenditures for nonpublic school students with disabilities that must be
met.
Effect
The lack of proper controls could enable material noncompliance to remain undetected. The
School Corporation did not expend the required portion for nonpublic school students with disabilities.
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 funds to the School Corporation.
INDIANA STATE BOARD OF ACCOUNTS 17
METROPOLITAN SCHOOL DISTRICT OF NORTH POSEY COUNTY
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 and provide necessary training to ensure the School Corporation expends the required portion for
nonpublic school students with disabilities.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.