FINDING 2023-010
Subject: COVID-19 - Education Stabilization Fund - Reporting
Federal Agency: Department of Education
Federal Program: COVID-19 - Education Stabilization Fund
Assistance Listings Numbers: 84.425D, 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013,
S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
Audit Findings: Material Weakness, Modified Opinion
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 with the Reporting compliance requirement.
The School Corporation was required to submit annual data reports to the Indiana Department of
Education (IDOE) via JotForm, a form/report builder. Data to be submitted included, but was not limited to,
current period expenditures, prior period expenditures, and expenditures per activity.
During the audit period, the School Corporation submitted two ESSER I reports, two ESSER II
reports, and one ESSER III report, for a total of five reports. A single employee prepared and submitted
each annual data report without a review or oversight process in place to prevent, or detect and correct,
errors.
All five reports were selected for testing, two of which were not supported by the School
Corporation's records. The errors identified were as follows:
1. The ESSER I, Year 2 report, which covered the period of October 1, 2020 to June 30,
2021, reported total expenses of $24,256; however, the School Corporation's ledger for
the same period had total expenses of $35,344.
INDIANA STATE BOARD OF ACCOUNTS
32
CROTHERSVILLE COMMUNITY SCHOOLS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
2. The ESSER II, Year 1 report, which covered the period of July 1, 2020 to June 30, 2021,
reported total expenditures of $25,264; however, the School Corporation's ledger for the
same period had total expenses of $244,923. In addition, the key line items "Meeting
Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health
Supports) - Personnel Services - Salaries" and "Meeting Students' Academic, Social,
Emotional, and Other Needs (Excluding Mental Health Supports) - Purchased Property
Services" were reported incorrectly.
The lack of internal controls was a systemic issue throughout the audit period. The noncompliance
was isolated to the ESSER I, Year 2 and ESSER II, Year 1 reports.
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). . . ."
2 CFR 200.302(b) states in part:
"The financial management system of each non-Federal entity must provide for the following:
. . .
(2) Accurate, current, and complete disclosure of the financial results of each Federal
award or program in accordance with the reporting requirements set forth in §§ 200.328
and 200.329. . . ."
Cause
A proper system of internal controls was not designed and implemented 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, reports submitted to the IDOE were not supported by the School Corporation's
underlying accounting records.
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.
INDIANA STATE BOARD OF ACCOUNTS
33
CROTHERSVILLE COMMUNITY SCHOOLS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
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 all reports submitted on behalf of the
COVID-19 - Education Stabilization Fund program funds are supported by the School Corporation's
underlying accounting records.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.