Finding Text
Finding 2022-007 Information on the federal program: Subject: COVID-19 ? Education Stabilization Fund ? Allowable Activities, Allowable Costs/Costs Principles Federal Agency: Department of Education Federal Program: Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U200013, S425D200013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Activities, Allowable Costs/Costs Principles Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over 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)...." 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 Allowable Activities, Allowable Costs/Costs Principles compliance requirement. Cause: Management had not developed and a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not have a documented internal control over payroll claims in place relating to the Allowable Activities and Allowable Costs compliance requirements. There was no documented, formal review over the supporting payroll distribution report to support the amount charged and allocated for each employee to the ESSER funds. The lack of internal controls was a systemic issue throughout the audit period. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Allowable Activities, Allowable Costs/Costs Principles compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.