Finding Text
FINDING 2022-005 Subject: Title I Grants to Local Educational Agencies - Internal Controls 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): S010A180014, S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Matching, Level of Effort, Earmarking; Reporting Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 28 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding relating to internal control over Reporting from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context 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 Matching, Level of Effort, Earmarking and the Reporting compliance requirements. Level of Effort and Reporting - State Per Pupil Expenditure The financial information submitted by the School Corporation to the Indiana Department of Education (IDOE) through the Form 9 report was used to calculate the School Corporation's Level of Effort - Maintenance of Effort as well as complete the State Per Pupil Expenditure (SPPE) Report. There was no oversight or review process at the School Corporation level over payroll expenditures to ensure the data used to complete the Form 9 was reported accurately in the correct fund, account, and object code. Reporting - Final Expenditure Report Schools are required to file the final expenditure report with the IDOE at the end of the grant cycle on or before December 30th. There was no oversight or review process in place to ensure that final expenditure reports submitted to the IDOE were accurate. The lack of internal controls was a systemic issue 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). . . ." Cause Management had not designed or implemented a system of internal controls that would have ensured compliance with requirements related to the grant agreement and the Matching, Level of Effort, Earmarking and the Reporting compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 29 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to design or implement a system of internal controls placed the School Corporation at risk of noncompliance with the grant agreement and the Matching, Level of Effort, Earmarking and the Reporting compliance requirements. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Matching, Level of Effort, Earmarking and the Reporting compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.