Finding Text
2022 ? 002 ? Elementary and Secondary School Emergency Relief Fund Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425C200018, S425D200013, S425U210013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $9,653.17, Likely - $299,904.00. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 14 of 14 selections were not supported by appropriate documentation to support the amounts charged to the grants. 14 of 14 selections did not have adequate time and effort documentation. Cause: Eastbrook Community School Corporation did not have a process implemented to track time and effort for the grant, as they believed that they were not required to. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.