Finding Text
FINDING 2024-006
Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Annual Report Card
Federal Agency: Department of Education
Federal Program: Title I Grants to Local Educational Agencies
Assistance Listings Number: 84.010
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 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 related to the Special Tests and Provisions - Annual Report Card
compliance requirement.
The School Corporation did not have effective internal controls in place to ensure that documentation
regarding the reason for a student being removed from the high school graduation cohort for
mobility reasons was prepared, reviewed, and retained.
The Special Tests and Provisions - Annual Report Card, High School Graduation Rate compliance
requirement necessitated that for students removed from the high school graduation cohort for mobility
reasons there be proper written documentation to support the identified mobility code. There were 15
students selected for testing. Of the 15 students tested, 1 student did not have the required supporting
documentation to substantiate removal from the cohort for mobility reasons.
The lack of internal controls, noncompliance, and failure to maintain adequate supporting documentation
were systemic issues throughout the audit period.
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). . . ."
INDIANA STATE BOARD OF ACCOUNTS
27
HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
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."
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. . . ."
Cause
Due to an ineffective internal control system, documentation was not maintained to provide
evidence of proper removal of a student from a cohort.
Effect
Without the proper design or implementation of internal controls, material noncompliance cannot
be capable of being prevented or detected and corrected. As a result, proper documentation to support
students' mobility was not collected, retained, or provided for audit.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that management of the School Corporation establish a proper system of
internal controls and develop policies and procedures to ensure mobility documentation is collected and
retained for audit.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.