Finding Text
FINDING 2024-005
Subject: COVID-19 - Education Stabilization Fund - Reporting
Federal Agency: Department of Education
Federal Program: COVID-19 - Education Stabilization Fund
Assistance Listings Numbers: 84.425D, 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
Audit Findings: Material Weakness, Other Matters
Repeat Finding
This is a repeat finding from the immediately prior audit report. The prior audit finding number was
2022-003.
Condition and Context
Internal controls were in place over reporting where two individuals were involved in submitting and
reviewing the reports prior to submission. However, the internal controls were not effective in order to
ensure compliance with requirements related to the grant agreement and the following compliance requirement:
Reporting.
INDIANA STATE BOARD OF ACCOUNTS
24
MT. VERNON COMMUNITY SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
The School Corporation was required to submit an annual data report to the Indiana Department
of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period
expenditure, and expenditures per activity.
During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER
II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and
ESSER III - Year 3.
The lack of effective internal controls was systemic throughout the audit period. The noncompliance
was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting.
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 200.334 states in part:
"Financial records, supporting documents, statistical records, and all other non-Federal entity
records pertinent to a Federal award must be retained for a period of three years from the date
of submission of the final expenditure report or, for the Federal awards that are renewed
quarterly or annual, from the date of submission of the quarterly or annual financial report,
respectively, as reported to the Federal awarding agency or pass-through entity in the case of
a subrecipient. . . ."
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. . . ."
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."
Cause
The School Corporation had policies and procedures in place over proper reporting on its annual
data report; however, officials indicated their understanding of the guidance provided as to which year's
expenditures were to be reported was different than what was required.
INDIANA STATE BOARD OF ACCOUNTS
25
MT. VERNON COMMUNITY SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Effect
Without the proper implementation of an effectively designed system of internal controls, the
internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were
not accurate.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended the School Corporation's management establish a proper system of internal
controls and develop policies and procedures to ensure expenditures on the annual data reporting for
ESSER II and ESSER III are accurate.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.