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FINDING 2022-011 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 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Eligibility, Special Tests and Provisions - Participation of Private School Children Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit report regarding Special Tests and Provisions - Participation of Private School Children. The prior audit finding number was 2020-018. INDIANA STATE BOARD OF ACCOUNTS 42 GOSHEN COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Eligibility - Real Time Reports The School Corporation submits the October Real Time report each year to the Indiana Department of Education (IDOE). This data is used to report the School Corporation's enrollment and poverty (socioeconomic) status of the students enrolled in each school. The School Corporation had not properly designed or implemented a system of internal controls over the October Real Time reports. In addition, enrollment and poverty numbers for the nonpublic school were manually entered into the Title I Application by the Title I Director without an oversight or review process to prevent or detect errors. Eligibility - Direct Certifications/Income Applications A list of students that qualified for free and reduced-price meals through direct certification was periodically downloaded from the IDOE website and imported into the school lunch program. However, there were no documented internal controls to ensure the information was uploaded on a timely basis. Additionally, there was no documentation of an oversight or review process over the Direct Certification upload into the Food Service software which was used to determine free and reduced lunch eligibility. Special Tests and Provisions - Participation of Private School Children Nonpublic school students are entitled to receive Title I services if they live in an eligible school attendance area and are failing or at risk of failing based on educational need. Planned services were provided to the nonpublic school students during the audit period; however, there was no internal control system in place to ensure the services were provided. 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 an effective system of internal controls that would have ensured compliance with the grant agreements and the Eligibility and the Special Tests and Provisions - Participation of Private School Children 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 Special Tests and Provisions - Participation of Private School Children compliance requirements. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls related to the grant agreement and the Eligibility and the Special Tests and Provisions - Participation of Private School Children compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.