Finding Text
Finding 2023-002
Information on the federal program:
Subject: Special Education Cluster – Suspension and Debarment
Federal Agency: Department of Education
Federal Programs: Special Education Grants to States, Special Education Preschool Grants
Assistance Listing Numbers: 84.027, 84.173
Federal Award Numbers and Years (or Other Identifying Numbers): 20611-047-PN01, 21611-047-PN01,
22611-047-PN01, 20619-047-PN01, 21619-047-PN01, 22619-047-PN01
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Procurement and Suspension and Debarment
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)...."
2 CFR 200.303 states:
“When you enter into a covered transaction with another person at the next lower tier, you must verify that
the person with whom you intend to do business is not excluded or disqualified.
You do this by:
(a) C hecking SAM Exclusions; or
(b) C ollecting a certification from that person; or
(c) Adding a clause or condition to the covered transaction with that person.”
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the program grant agreements and the compliance
requirements related to suspension and debarment.
Cause: The School Corporation’s management had not developed a system of internal controls that would
have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment
compliance requirement.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the program grant agreements and applicable Procurement and Suspension and
Debarment compliance requirements.
Questioned Costs: There were no questioned costs identified.
Context: The School Corporation is a member of the Cooperative School Services (Cooperative) and
serves as the fiscal agent for the Cooperative. The Cooperative operated the special education programs
on behalf of the School Corporation and managed the special education grant funds. As the grant
agreement was between the Indiana Department of Education and the School Corporation, the School
Corporation was responsible for compliance with the grant agreement and the Suspension and Debarment
compliance requirements.
During fiscal year 2022, The School Corporation did not have adequate internal controls in place to ensure
the Cooperative complied with the suspension and debarment requirements. The Special Education
Director obtained suspension and debarment certifications for contracted vendors over $25,000 without an
oversight or review process.
The lack of controls over suspension and debarment requirements was isolated to fiscal year 2022.
Identification as a repeat finding: Yes. Finding 2021-002.
Recommendation: We recommended that the School Corporation's management establish a system of
controls, including segregation of duties, to ensure compliance with the grant agreement and the
Procurement and Suspension and Debarment compliance requirement including documenting steps taken
to verify the vendor selected is not suspended or debarred.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.