FINDING 2024-006
Subject: COVID-19 - Education Stabilization Fund - Reporting
Federal Agency: Department of Education
Federal Program: COVID-19 - Education Stabilization Fund
Assistance Listings Number: 84.425
Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
Audit Findings: Material Weakness, Other Matters
Condition and Context
The School Corporation had not properly designed or implemented a system of internal controls,
which would include appropriate segregation of duties, that would likely be effective in preventing, or
detecting and correcting, noncompliance. The School Corporation was required to submit annual data
reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder and excel files.
Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures,
and expenditures per activity.
During the audit period, the School Corporation submitted one ESSER I Annual Data Report, two
ESSER II Annual Data Reports, and two ESSER III Annual Data Reports, for a total of five reports. There
was no documented evidence provided for audit that supported an oversight or review process was in place
to prevent, and detect and correct, errors on the five reports. Of the five reports tested, two contained the
following errors:
ESSER II, Year 3 Annual Data Report
Key line items "Addressing Physical Health and Safety Uses: Personnel Services -
Benefits" and "Addressing Physical Health and Safety Uses: Supplies" were understated
by $19,243 and $664,540, respectively.
INDIANA STATE BOARD OF ACCOUNTS
26
WEST NOBLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled
$1,002,932; however, the ledger had total expenses for the award, for that period, of
$817,390.
ESSER III, Year 3 Annual Data Report
Key line items "Mandatory Subgrant Funds - Exclusive of Learning Loss Set-Aside - Mental
Health Supports for Students and Staff Uses: Personnel Services - Salaries" and
"Mandatory Subgrant Funds - Learning Loss Set-Aside - Mental Health Supports for
Students and Staff Uses: Personnel Services - Benefits" were overstated by $46,500 and
$3,500, respectively.
Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled
$2,072,695; however, the ledger had total expenses for the award, for that period, of
$2,074,793.
The lack in internal controls was systemic throughout the audit period. The noncompliance was
isolated to fiscal year 2023-2024.
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). . . ."
2 CFR 200.302(b) states in part:
"The financial management system of each non-Federal entity must provide for the following:
. . .
(2) Accurate, current, and complete disclosure of the financial results of each Federal
award or program in accordance with the reporting requirements set forth in §§ 200.328
and 200.329. . . .
(3) Records that identify adequately the source and application of funds for federallyfunded
activities. These records must contain information pertaining to Federal
awards, authorizations, obligations, unobligated balances, assets, expenditures,
income and interest and be supported by source documentation. . . ."
34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format
that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other
responsibilities under the program."
34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with
program requirements."
INDIANA STATE BOARD OF ACCOUNTS
27
WEST NOBLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Cause
Due to staffing changes, the documentation for an oversight and review process was not identified
and presented for audit. Embedded within a properly designed and implemented internal control system
should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's
management statements of what should be done to effect internal controls, and procedures should consist
of actions that would implement these policies.
Effect
Without the proper implementation of an effectively designed system of internal controls, errors on
reports remained undetected and uncorrected. Noncompliance with the grant agreement and the
compliance requirement could result in the loss of federal funds to the School Corporation.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that the School Corporation's management establish effective internal controls
to ensure compliance and comply with the grant agreement and the Reporting compliance requirement.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.