Finding Text
FINDING 2023-005
Subject: Title I Grants to Local Educational Agencies - Eligibility
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): S010A210014, SA10A200014
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Findings: Material Weakness, Other Matters
INDIANA STATE BOARD OF ACCOUNTS
23
LAKE RIDGE SCHOOLS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Condition and Context
The School Corporation had not properly designed or implemented a system of internal controls,
which would include appropriate segregation of duties, that would likely be effective in preventing, or
detecting and correcting, noncompliance related to the enrollment and poverty data as reported by the
Indiana Department of Education (IDOE) and the School Corporation in the Title I application.
Public School (Local Educational Agency)
Eligibility for Title I is determined on the Eligible School Summary of the Title I application.
Enrollment and Poverty numbers for the public school district are automatically pulled from the
IDOE's Official Pupil Enrollment (PE) count for each school into the Eligible School Summary
page of the Title I application. These counts are based upon the School Corporation's records
as of October of the prior fiscal year. The School Corporation had not established a process
of review of the Eligibility Summary in the Title I application for the student enrollment and
poverty counts. There was no documentation of the School Corporation verifying the
enrollment and poverty counts in the Title I application.
Nonpublic Schools
Enrollment and poverty numbers for any non-public schools are manually entered into the
application by the School Corporation. The School Corporation established a process to
receive and review the listing of students from the nonpublic schools for enrollment and poverty
counts to be entered into the Title I application. However, the internal controls were ineffective
as the School Corporation requested to receive a listing of poverty student counts only; the list
of enrolled students was not provided by the nonpublic schools. Therefore, we were unable to
determine if the enrolled student count in the application was accurate.
The lack of internal controls and noncompliance were systemic issues 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). . . ."
34 CFR 200.78(a)(1) states:
"After reserving funds, as applicable, under § 200.77, including funds for equitable services for
private school students, their teachers, and their families, an LEA must allocate funds under
this subpart to school attendance areas and schools, identified as eligible and selected to
participate under section 1113(a) or (b) of the ESEA, in rank order on the basis of the total
number of public school children from low-income families in each area or school."
INDIANA STATE BOARD OF ACCOUNTS 24
LAKE RIDGE SCHOOLS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Cause
A proper system of internal controls was not designed by management of the School Corporation,
which would include segregation of key functions. Embedded within a properly designed and implemented
internal control system should be internal controls consisting of policies and procedures. Policies reflect
the School Corporation's management statements of what should be done to effect internal controls, and
procedures should consist of actions that would implement these policies.
Effect
Without the proper design or implementation of the components of a system of internal controls,
including policies and procedures that provide segregation of duties and additional oversight as needed,
the internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance. As a result, documentation was not available to determine if the enrolled and poverty
counts for the public and non-public data in the Title I application was accurate.
Noncompliance with the grant agreement and the compliance requirement could result in the loss
of future federal funds to the School Corporation.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that management of the School Corporation establish a proper system of
internal controls and develop policies and procedures to ensure documentation is retained to support
information in the Title I application.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.