Finding 964999 (2023-007)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-03-29

AI Summary

  • Core Issue: The School Corporation lacks a proper system of internal controls, leading to inadequate documentation for students removed from the high school graduation cohort.
  • Impacted Requirements: Compliance with federal regulations regarding documentation for student mobility is not met, risking future federal funding.
  • Recommended Follow-Up: Management should implement effective internal controls and develop clear policies to ensure proper documentation is collected and retained.

Finding Text

FINDING 2023-007 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Annual Report Card, High School Graduation Rate 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): S010A190014, S010A200014, S010A210014, S010A220014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Annual Report Card, High School Graduation Rate Audit Findings: Material Weakness, Other Matters 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 Special Tests and Provisions - Annual Report Card, High School Graduation Rate compliance requirement. The School Corporation did not have effective internal controls in place to ensure that documentation regarding the reason for a student being removed from the high school graduation cohort for mobility reasons was prepared, reviewed, and retained. INDIANA STATE BOARD OF ACCOUNTS 25 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The Special Tests and Provisions - Annual Report Card, High School Graduation Rate compliance requirement necessitated that for students removed from the high school graduation cohort for mobility reasons there be proper written documentation to support the identified mobility code. There were 11 students selected for testing. Of the 11 students tested, 1 student did not have the required supporting documentation to substantiate removal from the cohort for mobility reasons, and 9 students did not have any supporting documentation. The lack of internal controls, noncompliance, and failure to maintain adequate supporting documentation 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). . . ." 20 USC 7801(23)(B) states: "To remove a student from a cohort, a school or local educational agency shall require documentation, or obtain documentation from the State educational agency, to confirm that the student has transferred out, emigrated to another country, or transferred to a prison or juvenile facility, or is deceased." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 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. INDIANA STATE BOARD OF ACCOUNTS 26 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, proper documentation to support students' mobility was not collected, retained or provided for audit. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding 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 mobility documentation is collected and retained for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Categories

Internal Control / Segregation of Duties Subrecipient Monitoring Special Tests & Provisions Material Weakness Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 388549 2023-003
    Material Weakness
  • 388550 2023-003
    Material Weakness
  • 388551 2023-004
    Material Weakness
  • 388552 2023-004
    Material Weakness
  • 388553 2023-005
    Material Weakness
  • 388554 2023-005
    Material Weakness
  • 388555 2023-006
    Material Weakness
  • 388556 2023-006
    Material Weakness
  • 388557 2023-007
    Material Weakness
  • 388558 2023-007
    Material Weakness
  • 388559 2023-008
    Material Weakness
  • 388560 2023-008
    Material Weakness
  • 388561 2023-009
    Material Weakness
  • 388562 2023-010
    Material Weakness
  • 388563 2023-010
    Material Weakness
  • 388564 2023-010
    Material Weakness
  • 388565 2023-010
    Material Weakness
  • 964991 2023-003
    Material Weakness
  • 964992 2023-003
    Material Weakness
  • 964993 2023-004
    Material Weakness
  • 964994 2023-004
    Material Weakness
  • 964995 2023-005
    Material Weakness
  • 964996 2023-005
    Material Weakness
  • 964997 2023-006
    Material Weakness
  • 964998 2023-006
    Material Weakness
  • 965000 2023-007
    Material Weakness
  • 965001 2023-008
    Material Weakness
  • 965002 2023-008
    Material Weakness
  • 965003 2023-009
    Material Weakness
  • 965004 2023-010
    Material Weakness
  • 965005 2023-010
    Material Weakness
  • 965006 2023-010
    Material Weakness
  • 965007 2023-010
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
10.555 National School Lunch Program 2023 $234,104
10.555 National School Lunch Program 2022 $218,463
84.425 Education Stabilization Fund 2023 $164,854
84.027 Special Education_grants to States 2023 $157,759
84.027 Special Education_grants to States 2022 $127,468
84.010 Title I Grants to Local Educational Agencies 2022 $108,294
84.010 Title I Grants to Local Educational Agencies 2023 $90,526
10.553 School Breakfast Program 2022 $48,228
10.553 School Breakfast Program 2023 $46,815
84.358 Rural Education 2022 $35,857
84.425 Education Stabilization Fund 2022 $34,731
84.358 Rural Education 2023 $34,498
84.287 Twenty-First Century Community Learning Centers 2022 $30,071
84.367 Improving Teacher Quality State Grants 2023 $16,376
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) 2022 $12,840
84.173 Special Education_preschool Grants 2023 $5,514
84.173 Special Education_preschool Grants 2022 $4,599
10.649 Pandemic Ebt Administrative Costs 2023 $628
10.649 Pandemic Ebt Administrative Costs 2022 $614