Finding Text
FINDING 2022-006 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): S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Eligibility, Reporting Audit Finding: Material Weakness Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Eligibility and the Reporting compliance requirements. Eligibility The School Corporation had not designed, nor implemented policies and procedures to ensure that information submitted to the Indiana Department of Education for Enrollment and Poverty were supported by the School Corporation's records. Reporting The School Corporation had not designed, nor implemented a system of internal control to ensure that the Annual Expenditure Report was complete and accurately submitted. The report was prepared by one employee without an oversight, review, or approval process in place to prevent, or detect and correct errors. 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 developed, nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Eligibility and the Reporting compliance requirements. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Eligibility 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 control related to the grant agreement and the Eligibility 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.