Center Grove Community School CorporationLocal Government

FINDING 2021-002 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Program Income, Special Tests and Provisions ? Paid Lunch Equity 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 in order to ensure compliance with requirements related to the grant agreement and the following compliance requirements: Program Income and Special Tests and Provisions ? Paid Lunch Equity. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the program income and paid lunch equity requirements throughout the entire audit period. 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: Program Income: We selected 4 months during the audit period to test for controls over the monthly recognition of program income. In one instance, we noted program income was not being recognized timely. Per discussions with management, due to a software issue food service receipts were being receipted in Fund 8400 (Prepaid Food Fund) and software would not allow a transfer to Fund 0800 (School Lunch Fund). The issue impacting receipts from February 2021 through June 2021. Management noted the issue was corrected in August 2021, subsequent to the audit period. Paid Lunch Equity: There were no meal prices approved by the School Board for the 2019-2020 school year. The School Board did approve meal prices for the 2020-2021 school year. The lack of properly designed and implemented controls is only applicable to the 2019-2020 school year. Identification as a repeat finding, if applicable: Yes, See Finding 2019-001. Recommendation: We recommend that the School Corporation review controls surrounding program income to verify the monthly transfers are correct. This review should be performed by someone other than the individual preparing the monthly transfers and we recommend this review be formally documented. The School Corporation was exempt from paid lunch equity calculations for both school years during the audit period. We recommend management review controls around the paid lunch equity to ensure the PLE calculation is reviewed by someone other than the preparer. This review should be formally documented. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

FINDING 2021-003 Information on the federal program: Subject: Child Nutrition Cluster ? Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Assistance Listing Numbers: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Significant Deficiency 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 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 system of internal control was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Cause: Management of the School Corporation had not developed a system of internal control that would have ensured compliance with the compliance requirement identified above. Effect: The failure to establish an effective internal control system could enable material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of the West Indy Cooperative (Cooperative). The Cooperative completed the Procurement and Suspension and Debarment compliance requirements on behalf of the School Corporation. The agreement between Center Grove Community School Corporation and West Indy Cooperative stated: "Each member of the Cooperative must have bids approved by their school boards, if applicable." Bids procured by West Indy Cooperative for the 2019-2020 school year were not approved by the School Board. The School Board did approve bids procured by the cooperative during 2020-2021. The lack of internal controls was isolated to the 2019-2020 school year. Identification as a repeating finding: Yes, see Finding 2019-002. Recommendation: We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a Corrective Action Plan.

FINDING 2019-001 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program CFDA Numbers: 10.553, 10.555 Federal Award Number and Year (or Other Identifying Number): Agreement 41-4205 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Program Income, Special Tests and Provisions - Paid Lunch Equity Audit Finding: Material Weakness Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the following compliance requirements: Program Income and Special Tests and Provisions - Paid Lunch Equity. Program Income There was no documentation that an oversight or review process had been established to ensure that program income was properly assessed and recorded until June 2019. Paid Lunch Equity (National School Lunch Program only) There was one person responsible for completing the paid lunch equity calculation, with no oversight or review of the calculation. In addition, there were no meal prices approved by the School Board during the audit period. The lack of properly designed and implemented controls was a systemic issue, which occurred 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). . . ." Cause The School Corporation's management had not developed a system of internal controls that segregated key functions. 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 listed above. A lack of segregation of duties within an internal control system could also allow noncompliance with the compliance requirements and allow 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. Recommendation We recommended that the School Corporation's management establish a system of internal controls, including segregation of duties, related to the grant agreement and the compliance requirements listed above. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2019-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program CFDA Numbers: 10.553, 10.555 Federal Award Number and Year (or Other Identifying Number): Agreement 41-4205 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement The School Corporation had not established an effective system of internal controls to ensure that proper procurement methods were selected prior to purchasing goods related to small purchases. There was one person responsible for selecting vendors, with no oversight or review of the vendor selected. The School Corporation had not established an effective system of internal controls to ensure that proper procurement methods were selected prior to purchasing goods related to large purchases. The School Corporation utilized a vendor for which the total purchases for fiscal year 2017-2018 exceeded the simplified acquisition threshold, but the School Corporation did not obtain bids. The agreement between Center Grove Community School Corporation and West Indy Cooperative stated: "Each member of the Cooperative must have bids approved by their school boards, if applicable." Bids procured by West Indy Cooperative during the audit period were not approved by the School Board. Suspension and Debarment The School Corporation had not established an effective system of internal controls to ensure that vendors with whom the School Corporation entered into a covered transaction were not suspended or debarred or otherwise excluded from or ineligible for participation in federal assistance programs. There was one person responsible for verifying that vendors were not suspended or debarred, with no oversight or review of the verification. The lack of 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). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. (c) Procurement by sealed bids (formal advertising). Bids are publicly solicited and a firm fixed price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bid method is the preferred method for procuring construction, if the conditions in paragraph (c)(1) of this section apply. (1) In order for sealed bidding to be feasible, the following conditions should be present: (i) A complete, adequate, and realistic specification or purchase description is available; (ii) Two or more responsible bidders are willing and able to compete effectively for the business; and (iii) The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price. (2) If sealed bids are used, the following requirements apply: (i) Bids must be solicited from an adequate number of known suppliers, providing them sufficient response time prior to the date set for opening the bids, for state, local, and tribal governments, the invitation for bids must be publically advertised; (ii) The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond; (iii) All bids will be opened at the time and place prescribed in the invitation for bids, and for local and tribal governments, the bids must be opened publicly; (iv) A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and (v) Any or all bids may be rejected if there is a sound documented reason. . . ." Cause The School Corporation's management had not developed and implemented a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective internal control system placed the School Corporation in noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Noncompliance with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

GSA_MIGRATION

GSA_MIGRATION