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FINDING 2022-005 Subject: Special Education Cluster (IDEA) - Internal Controls Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-014-PN01,19619-014 PN01, 20611-014-PN01, 20619-014-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-009. Condition and Context The School Corporation had not properly designed or implemented an effective system of internal controls to prevent, or detect and correct, noncompliance. Although reimbursement requests were prepared by the Grant Manager and reviewed by the Treasurer the documentation, or lack thereof, that accompanied the reimbursement requests did not provide sufficient detail to know if expenses were paid prior to requesting reimbursement. 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 established an effective system of internal controls that would have ensured compliance with the grant agreement and the Cash Management compliance requirement. Effect The failure to design and implement an effective system of internal controls placed the School Corporation at risk of noncompliance with the grant agreement and the Cash Management compliance requirement. 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 Cash Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.