Finding Text
FINDING 2023-005
Information on the federal program:
Subject: Title I Grants to Local Educational Agencies - Internal Controls
Federal Agency: Department of Education
Federal Program: Title I Grants to Local Educational Agencies
Assistance Listing Number: 84.010A
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Maintenance of Effort
Audit Finding: Significant Deficiency
Criteria: 2 CFR section 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 to ensure compliance with requirements related to the grant agreement and the maintenance of effort compliance requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs.
Questioned Costs: There were no questioned costs identified.
Context: In a sample of twenty five disbursements selected for proper classification, one disbursement for $13,000 was coded to the incorrect account code. The State uses the expenditures and account codes reported by the School Corporation on the semi-annual form 9 report to determine if the School Corporation has met its maintenance of effort requirement.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend that the School Corporation establish a documented, primary review of all Title I claims to ensure they are recorded to the correct account code.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.