Finding Text
FINDING 2022-005 Information on the federal program: Subject: Title I Grants to Local Educational Agencies - Earmarking Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014; S010A20014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Finding: Significant Deficiency 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 awards 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)...." 20 USC 6318(a)(3) states in part: "(A) In general. Each local educational agency shall reserve at least 1 percent of its allocation under subpart 2 to assist schools to carry out the activities described in this section, except that this subparagraph shall not apply if 1 percent of such agency's allocation under subpart 2 for the fiscal year for which the determination is made is $5,000 or less. Nothing in this subparagraph shall be construed to limit local educational agencies from reserving more than 1 percent of its allocation under subpart 2 to assist schools to carry out activities described in this section. . . . Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Cause: Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement could result in the loss of further federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not implemented controls to ensure that the required level of expenditures for Parental Involvement were spent. Expenditures for Parental Involvement were $4,129 and $9,556 below the minimum required per the approved grant application for grants S010A190014 andSA010A200014, respectively. The lack of internal controls and noncompliance were isolated to the S010A190014 and S010A200014 grant awards. Identification as a repeat finding, if applicable: No Recommendation: We recommended that the School Corporation?s management establish effective internal controls to ensure compliance and comply with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.