Finding Text
Information on the federal program:
Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Annual Report
Card/High School Graduation Rate
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: Special Tests and Provisions - Annual Report
Card/High School Graduation Rate
Audit Finding: Material Weakness
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). . . ."
20 USC 7801(23)(B) states:
"To remove a student from a cohort, a school or local educational agency shall require documentation, or
obtain documentation from the State educational agency, to confirm that the student has transferred out,
emigrated to another country, or transferred to a prison or juvenile facility, or is deceased.”
Condition: An effective internal control system was not designed or implemented at the School Corporation
to ensure compliance with requirements related to the grant agreement and the Special Tests and
Provisions - Annual Report Card, High School Graduation Rate compliance requirement.
The School Corporation must report graduation rate data for all public high schools within the corporation
using the four-year adjusted cohort rate. To remove a student from the cohort, the School Corporation must
confirm the reason for removal in writing. Additionally, required documentation for each removal type must
be retained by the School Corporation.
Cause: Management had not designed or implemented a system of internal controls that would have
ensured compliance with the Special Tests and Provisions - Annual Report Card, High School Graduation
Rate compliance requirement.
Effect: The failure to establish an effective system of internal controls enabled noncompliance to go
undetected. Noncompliance with the grant agreement and the Special Tests and Provisions - Annual Report
Card, High School Graduation Rate compliance requirement could result in the loss of future federal funds
to the School Corporation.
Questioned Costs: There were no questioned costs identified.
Context: The School Corporation had not established internal controls to ensure required documentation
to support the reason for a student's removal from the high school graduation cohort for mobility reasons
was prepared, reviewed, and retained. For three of the eight students tested, the School Corporation was
unable to provide documentation to support the removal of the student from the graduation cohort.
Identification as a repeat finding, if applicable: Yes. See finding 2022-008 in the prior audit report.
Recommendation: We recommended that the School Corporation's management establish a system of
internal controls to ensure compliance and comply with the Special Tests and Provisions - Annual Report
Card, High School Graduation Rate compliance requirement.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.