Finding Text
Information on the federal program:
Subject: Title I Grants to Local Educational Agencies – Allowable Costs/Cost Principles
Federal Agency: Department of Education
Federal Program: Title I Grants to Local Educational Agencies
Assistance Listing Number: 84.010A
Federal Award Numbers and Years (or Other Identifying Numbers): S010A210014, S010A220014,
S010A230014
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Allowable Costs/Cost Principles
Audit Finding: Material Weakness
Criteria: 2 CFR section 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). . . ."
Condition: An effective system of internal controls was not in place at the School Corporation to ensure
compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles
compliance requirement.
Cause: Management had not developed an effective system of internal controls that would have ensured
compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement.
Effect: The failure to establish an effective system of internal controls, as well as adequately document
costs, enabled noncompliance to go undetected. Noncompliance with the grant agreement and the
Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to
the School Corporation.
Questioned Costs: There were no questioned costs identified.
Context: We noted that for 11 payroll claims in a sample of 60, the School Corporation was not able to
provide semi-annual certifications or support that the personnel were approved to be paid with Title I funds.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommended that the School Corporation's management establish a system of
internal controls to ensure that documentation will be maintained and comply with the grant agreement and
the Allowable Costs/Cost Principles compliance requirement.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.