Wawasee Community School Corporation

FINDING 2025-003 Subject: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2024, FY2025 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented an effective system of internal controls over review of individual free and reduced status applications and information management in the Skyward Software System used to determine and maintain eligibility status. Individual Applications The School Corporation noted individual applications for both direct certification and income eligible students would be printed and reviewed after the system makes a determination of eligibility status. Out of 40 students tested, no documentation of this review was provided for 34 of the students. INDIANA STATE BOARD OF ACCOUNTS 20 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Skyward Software System The School Corporation is required to design internal controls ensuring computer systems used to maintain student benefit status are secured. Currently, the Skyward Software System allows all school lunch employees to make changes to student benefit status, and there is no indication or record within the system who makes these changes. Additionally, income eligibility guidelines in the system that determine whether students are eligible based on income are updated by the system automatically every year. The School Corporation is required to perform an annual review to ensure these guidelines are accurate. However, no annual review is done by the School Corporation staff. The issues were systemic 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). . . ." 7 CFR 245.3(c) states in part: "Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs to children eligible under its eligibility criteria. . . ." 7 CFR 245.6(f)(1) states in part: ". . . Only persons directly connected with the administration or enforcement of a program or activity listed in paragraphs (f)(2) or (f)(3) of this section may have access to children's eligibility information, without parental consent. Persons considered directly connected with administration or enforcement of a program or activity listed in paragraphs (f)(2) or (f)(3) of this section are Federal, State, or local program operators responsible for the ongoing operation of the program or activity or responsible for program compliance. Program operators may include persons responsible for carrying out program requirements and monitoring, reviewing, auditing, or investigating the program. Program operators may include contractors, to the extent those persons have a need to know the information for program administration or enforcement. Contractors may include evaluators, auditors, and others with whom Federal or State agencies and program operators contract with to assist in the administration or enforcement of their program in their behalf." Cause A proper system of internal controls over the Skyward Software System was not properly designed and implemented as the School Corporation was not aware its process did not cover the requirements to restrict access to the Skyward Software System and review the income eligibility guidelines yearly. Additionally, the School Corporation was unable to provide documentation to demonstrate it reviewed individual applications to ensure eligibility status was determined accurately. The School Corporation noted that staff turnover resulted in lost documentation; therefore, the School Corporation was unable to provide any other records supporting that staff verified the eligibility status was determined accurately. INDIANA STATE BOARD OF ACCOUNTS 21 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without a proper system of internal controls, the School Corporation cannot ensure eligibility determinations made by either the Skyward Software System or employees are accurate. The School Corporation cannot ensure modifications made in the Skyward Software System to student eligibility status are traceable, which could result in improper changes to student eligibility status. Additionally, a properly designed annual review process over the income eligibility guidelines within the Skyward Software System is necessary to ensure accurate determinations. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation strengthen its internal controls over eligibility applications to ensure eligibility determinations made by either the Skyward Software System or employees are accurate. We further recommended the School Corporation update the Skyward Software System to identify who makes any modifications within the system to ensure modifications are fully traceable. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-004 Subject: Child Nutrition Cluster - Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2024, FY2025 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Significant Deficiency Condition and Context Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. The School Corporation had not designed or implemented internal controls, which would consist of policies and procedures, to ensure that vendors were not suspended, or debarred prior to entering into a covered transaction. The School Corporation verifies through review of the SAM exclusions each time it begins doing business with a new vendor. However, a second individual does not verify the website has been reviewed. INDIANA STATE BOARD OF ACCOUNTS 22 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 provided documentation showing it checked the SAM exclusions to verify the contractor was not suspended or debarred prior to entering into the contract but acknowledged no second employee reviews to ensure the procedure was performed as the School Corporation was not aware this was necessary. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation cannot ensure vendors with whom contracts are entered into are not suspended or debarred from doing business with governmental entities. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls that includes review of processes performed to ensure vendors are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-005 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 Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014, S010A240014 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Eligibility, Matching, Level of Effort, Earmarking Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 23 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding for internal controls only from the immediately prior audit report. The prior audit finding numbers were 2023-007 and 2023-008. Condition and Context Eligibility Eligibility for Title I is determined on the Eligible School Summary of the Tile I application. Enrollment and poverty numbers are automatically pulled from the Indiana Department of Education's (IDOE) Official Pupil Enrollment count for each school into the Eligible School Summary page of the Tile I application. The counts that are prepopulated should be based on the School Corporation's records as of October of the prior fiscal year. There was no documented review by the School Corporation of the enrollment and poverty counts that were prepopulated into the School Corporation's Title I grant application. Level of Effort - Individual Transactions (Vendor) The Form 9 (financial) data was submitted by the School Corporation to the IDOE semiannually. The data reported included the School Corporation's expenditures recorded during that period. The IDOE calculated Maintenance of Effort based on the expenditure information submitted on the Form 9 for that fiscal year. To verify amounts used by the IDOE in their computation were derived from the books and records of the School Corporation, costs were reviewed to ensure they were recorded properly as to account and object code and reported correctly on the Form 9. The School Corporation did not have an oversight process in place to ensure that expenditures for vendors were posted to the correct fund, account, and object codes. During review of expenditures, it was determined that there was not a documented second review in place for all vendor payments being made. The lack of internal controls was a systemic issue 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 24 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Although the School Corporation stated that one person is verifying the enrollment and poverty counts that are prepopulated by the IDOE into the School Corporation's Title I grant application each year back to School Corporation records in the student information system and program eligibility files, documentation could not be presented for audit that this verification occurred. There was also not an additional person reviewing the verification for accuracy. One person entered and posted vendor expenditures in the accounting system without a review in place to ensure the expenditures were posted to the correct fund, account, and object codes. Although additional employees were involved in the claims process either by submitting paper accounts payable vouchers, signing invoices, or approving purchase orders for some claims we reviewed, there was no review by a second person after the expenditures were entered into the accounting system. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation cannot ensure that the enrollment and poverty counts prepopulated into the School Corporation's Title I grant applications are accurate, nor can the School Corporation ensure that expenditures entered into the accounting system are coded correctly. Incorrect enrollment and poverty counts in the Title I application can lead to an incorrect amount of Title I funding being received by the School Corporation. Incorrect coding of expenditures in the accounting system can result in incorrect Maintenance of Effort calculations. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation strengthen its system of internal controls over the verification of enrollment and poverty counts prepopulated into the Title I grant application by having an additional person review the verification of the counts back to School Corporation records. We also recommended strengthening the School Corporation policies and procedures to ensure that appropriate supporting documentation of this verification and review is retained to be presented for audit. We further recommend that management of the School Corporation establish and implement an effective system of internal controls over vendor expenditures to ensure expenditures for vendors are posted to the correct fund, account, and object codes. For all vendor expenditures, we recommended they are reviewed by an individual other than the person entering them into the accounting system, along with the supporting documentation of the expenditure, and that this process is documented as to the preparer and reviewer. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-006 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): S010A220014, S010A230014, S010A240014 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 is required to report graduation rate data for its public high school using the four-year adjusted cohort rate. To remove a student from the cohort, the School Corporation must confirm the reason for removal in writing. Additionally, required documentation for each removal type must be retained by the School Corporation. The School Corporation did not have effective internal controls to ensure required documentation to support the reason for a student's removal from the high school graduation cohort for mobility reasons was prepared, reviewed, and retained. Although one person updated the reason for a student's removal in the Student Information System, and another reviewed the documentation and approved the reason, the internal control was not sufficient to ensure compliance. Of the seven students tested, the School Corporation provided incorrect supporting documentation to substantiate the removal of two students from the cohort. 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). . . ." 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." INDIANA STATE BOARD OF ACCOUNTS 26 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause There were two instances we noted where proper documentation was not retained. For one of the instances, the employee preparing the documentation was aware of the documentation requirements for the mobility code used, the proper documentation was just not retained due to an oversight. For the other instance, the employee preparing the documentation was not aware of the documentation requirements of the specific mobility code used. Additionally, although the School Corporation had a documented internal control in place where one person updated the reason for a student's removal in the Student Information System, and another person reviewed the documentation and approved the reason, the internal control was not sufficient to ensure proper documentation was prepared, reviewed, and retained for all students removed from the cohort. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation cannot ensure proper documentation is maintained to support the removal of all students from the high school graduation cohort for mobility reasons. As a result, proper documentation was not maintained for all students removed from the cohort to support their removal. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation strengthen its system of internal controls over students' removal from the high school graduation cohort for mobility reasons by ensuring the documentation supporting each student's removal from the cohort for mobility reasons is in compliance with the different documentation requirements established by the Indiana Department of Education. We also recommended strengthening the School Corporation policies and procedures to ensure that appropriate supporting documentation is retained to be presented for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-007 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Assessment System Security 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): S010A220014, S010A230014, S010A240014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Assessment System Security Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 27 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context State educational agencies (SEA), in consultation with local educational agencies (LEA), are required to establish and maintain an assessment security system that is valid, reliable, and consistent with relevant professional and technical standards. Within its assessment system, SEAs must have policies and procedures to maintain test security measures and ensure that LEAs implement those policies and procedures. As such, the Indiana Department of Education created and published the Indiana Assessments Policy Manual. As a part of the assessment security, any individual who administers, handles, or has access to secure test materials at the school or school corporation shall complete assessment training and sign a testing security and integrity statement that remains on file in the appropriate building-level office each year. Each individual required to sign the testing integrity agreement shall sign the form by an established date. The School Corporation had a process to provide assessment system security training and to ensure each employee that attended training signed the agreement indicating training was received. However, there was no process in place to ensure that all school employees required to be trained were trained. Due to the lack of internal controls over ensuring employees requiring training received training, some employees that should have been trained were not. A sample of 27 employees required to receive training was selected for testing from the School Corporation's roster. Of the 27 employees tested, 2 did not receive the training as required. Additionally, 1 employee completed the training and signed the agreement, but it was completed 37 days late. 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). . . ." 511 IAC 5-5-5(b) states: "Any individual who administers, handles, or has access to secure test materials at the school or school corporation shall complete assessment training and sign a testing security and integrity agreement to remain on file in the appropriate building-level office each year." Cause There was not an internal control in place to ensure that all employees who were required to complete assessment training took the training and signed the agreement by the date established. The School Corporation was not aware that this was necessary, noting that they used a training platform to provide the training, which sends automated email reminders to employees to complete the training until it is completed. INDIANA STATE BOARD OF ACCOUNTS 28 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation cannot ensure all employees required to complete the training and sign the testing security and integrity statement do so by the established date. As a result, not all employees required to complete the assessment training and sign the testing security and integrity statement did so. Additionally, not all employees who completed the assessment training and signed the testing security and integrity statement did so by the established date. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish and implement an effective system of internal control over security assessment training which ensures that all employees required to complete the training and sign the testing security and integrity statement do so by the established date. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-008 Subject: Special Education Cluster (IDEA) - Matching, Level of Effort, Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 21611-113-PN01, 22611-113-PN01, 23611-113-PN01, 24611-113-PN01, H027X210084, 23619-113-PN01, 24619-113-PN01, 25619-113-PN01, 22619-113-ARP, 86203 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Finding: Material Weakness Condition and Context The Form 9 (financial) data was submitted by the School Corporation to the Indiana Department of Education (IDOE) semi-annually. The data reported included the School Corporation's expenditures recorded during that period. The IDOE calculated Maintenance of Effort based on the expenditure information submitted on Form 9 for that fiscal year. To verify amounts used by the IDOE in their computation were derived from the books and records of the School Corporation, costs were reviewed to ensure they were recorded properly as to account and object code and reported correctly on the Form 9. INDIANA STATE BOARD OF ACCOUNTS 29 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation did not have an oversight process in place to ensure that expenditures for vendors were posted to the correct fund, account, and object codes. During review of expenditures, it was determined that there was not a documented second review in place for all vendor payments being made. This issue was systemic throughout the audit period. 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 One person entered and posted vendor expenditures in the accounting system without a review in place to ensure the expenditures were posted to the correct fund, account, and object codes. Although additional employees were involved in the claims process either by submitting paper accounts payable vouchers, signing invoices, or approving purchase orders for some claims we reviewed, there was no review by a second person after the expenditures were entered into the accounting system. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation cannot ensure that expenditures entered into the accounting system are coded correctly. Incorrect coding of expenditures in the accounting system can result in incorrect Maintenance of Effort calculations. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish and implement an effective system of internal controls over vendor expenditures to ensure expenditures for vendors are posted to the correct fund, account, and object codes. For all vendor expenditures, we recommended they are reviewed by an individual other than the person entering them into the accounting system, along with the supporting documentation of the expenditure, and that this process is documented as to the preparer and reviewer. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2023-004 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2022, FY2023 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Eligibility, Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding for Eligibility from the prior audit report. The prior audit finding number was 2021-005. Condition and Context Eligibility Any child enrolled in a participating school who meets the applicable program's definition of "child," may receive meals under the applicable programs. A child belonging to households meeting nationwide income eligibility requirements may receive meals at no charge or at a reduced price. Children that have been determined ineligible for free or reduced-price meals pay the full price for their meals. A child's eligibility for free and reduced-priced meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnished such information as family income and family size. The School Corporation determines eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Annual eligibility determinations may also be based on the child's household receiving benefits under SNAP, FDPIR, the Head Start Program, or, under most circumstances, the TANF program. A household may furnish documentation if its participation in one of those programs, or the School Corporation may obtain the information directly from the State or local agency that administers those programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application. Paper applications and online applications are processed in the School Corporation's software system to determine if students are eligible for free or reduced meals. Paper applications are input by the Nutrition Services Director and online applications are directly submitted by parents. The software's determination of eligibility is recalculated by the Nutrition Services Director without an oversight or review process in place to ensure accuracy. Additionally, the Nutrition Services Director downloaded the Direct Certifications file from the CNC Web Portal and uploaded the file into the School Corporation's software on a monthly basis without a documented oversight or review process in place to ensure directly certified students were properly processed. The lack of internal controls was isolated to fiscal year 2022-2023. Reporting The School Corporation must submit monthly sponsor claims for reimbursement (claims) for meals and snacks served to eligible students within 60 days following the last day of the month covered by the claim. Claims were submitted to the Indiana Department of Education (IDOE) as required; however, the claims were prepared by one employee without a review or approval process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue 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 A proper system of internal controls, which would include segregation of key functions, was not designed by management of the School Corporation. 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. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2023-005 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles, Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 19611-113-PN01, 20611-113-PN01, 21611-113-PN01, 21619-014-PN01, 22611-113-PN01, 22619-014-PN01, 23611-113-PN01, 23619-014-PN01, 22611-113-ARP, 22619-113-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Costs/Cost Principles, Procurement and Suspension and Debarment Audit Finding: Material Weakness Condition and Context Direct charges to a federal award are to be for allowable costs and made in conformance with the applicable cost principles. In addition, procurements under federal awards are to be made in compliance with applicable federal regulations and other procurement requirements specific to an award. The School Corporation's process to ensure an expense was for an allowable cost in conformance with the cost principles and procured appropriately was for the Deputy Treasurer or Grant Administrator to prepare an Accounts Payable Voucher (APV), and the Corporation Treasurer to review and approve the APV. To test the internal control for effectiveness, a sample of 40 APVs charged to the grant was selected for testing. For 9 of the 40 APVs tested, there was not a documented review by the Corporation Treasurer. As such, we determined the internal control as designed could not be effective at ensuring an expense was for an allowable cost in conformance with the cost principles and procured appropriately The lack of internal controls was a systemic issue 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 A proper system of internal controls, which would include segregation of key functions, was not implemented by management of the School Corporation. 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. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2023-006 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 Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A200014, S010A210014, S010A220014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-007. Condition and Context Direct charges to a federal award are to be for allowable costs and made in conformance with the applicable cost principles. The School Corporation's process to ensure an expense was for an allowable cost and in conformance with the cost principles was for the Deputy Treasurer or Grant Administrator to prepare an Accounts Payable Voucher (APV) and the Corporation Treasurer to review and approve the APV. To test the internal control for effectiveness, a sample of 40 APVs charged to the grant was selected for testing. For 11 of the 40 APVs tested, there was not a documented review by the Corporation Treasurer. As such, we determined the internal control as designed could not be effective at ensuring an expense was for an allowable cost, in conformance with the cost principles and procured appropriately. The lack of internal controls was a systemic issue 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 A proper system of internal controls, which would include segregation of key functions, was not implemented by management of the School Corporation. 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 implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place to ensure compliance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2023-007 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): S010A200014, S010A210014, S010A220014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Modified Opinion Condition and Context Eligibility for Title I is determined on the Eligible School Summary of the Tile I application. Enrollment and Poverty numbers are automatically pulled from the Indiana Department of Education's (IDOE) Official Pupil Enrollment (PE) count for each school into the Eligible School Summary page of the Tile I application. The counts that are pre-populated should be based on the School Corporation's records as of October of the prior fiscal year. During the audit period, the School Corporation submitted two Title I Applications. The School Corporation was required to use the October 2020 Real Time Report data for the 2021-2022 Title I application and the October 2021 Real Time Report data for the 2022-2023 Title I Application submitted to the IDOE. Data to be submitted included student socioeconomic status information. The October 2021 Real Time Report used for the 2022-2023 Title I Application, was not available for review. As such, we were unable to verify the amounts reported in the grant application. Additionally, we were unable to verify if the correct socioeconomic status was properly reported for any of the students. The lack of internal controls and noncompliance were isolated to the October 2021 Real Time Report and 2022-2023 Title I Application. 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 200.334 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. . . ." 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." Cause A proper system of internal controls was not designed by management of the School Corporation. 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 implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, proper documentation was not maintained to ensure enrollment and poverty statues in the Title I Application were accurate. 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 design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place to ensure compliance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2023-008 Subject: Title I Grants to Local Educational Agencies - Matching, Level of Effort, Earmarking 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): S010A200014, S010A210014, S010A220014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context Earmarking A portion of the School Corporation's Title I allocation was required to be set aside for homeless reservation. The required amount to be set aside was indicated in the Title I grant application. The School Corporation is responsible for monitoring each required set aside throughout the life of the grant to ensure the obligation is met. There was no oversight or review process in place to ensure monitoring of each required set aside. The School Corporation did not provide documentation to show that the obligation was met, or not met, to service all the homeless students in the School Corporation and did not transfer the unused funds to the next grant award. Level of Effort - Individual Transactions (Vendor) The Form 9 (financial) data was submitted by the School Corporation to the Indiana Department of Education (IDOE) semi-annually. The data reported included the School Corporation's expenditures recorded during that period. The IDOE calculated Maintenance of Effort based on the expenditure information submitted on the Form 9 for that fiscal year. To verify amounts used by the IDOE in their computation were derived from the books and records of the School Corporation, costs were reviewed to ensure they were recorded properly as to account and object code and reported correctly on the Form 9. The School Corporation did not have an oversight process in place to ensure that expenditures for vendor were posted to the correct fund, account, and object codes. 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). . . ." 20 USC 6313I(3)(A) states: "A local educational agency shall reserve such funds as are necessary under this part, determined in accordance with subparagraphs (B) and (C), to provide services comparable to those provided to children in schools funded under this part to serve— (i) homeless children and youths, including providing educationally related support services to children in shelters and other locations where children may live; (ii) children in local institutions for neglected children; and (iii) if appropriate, children in local institutions for delinquent children, and neglected or delinquent children in community day programs." Cause A proper system of internal controls, which would include segregation of key functions, was not designed by management of the School Corporation. 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 implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, proper documentation was not maintained to ensure the obligation to service homeless students was met or unmet. 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 design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place to ensure compliance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2021-003 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, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed and Unallowed, Allowable Costs/Costs Principles Audit Finding: Material Weakness 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 activities allowed or unallowed and allowable costs/cost principles compliance requirement. Cause: Management had not developed a system of internal controls to document approval of disbursements. 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: During the testing of vendor disbursements charged to Fund 0800, Food Service, we noted five instances in a sample of 40 vendor disbursements in which the accounts payable voucher did not have a documented approval. We also only noted one instance in testing of payroll disbursements, where an employee did not have a signed pay rate form to support the rate paid for the time period selected. Identification as a repeat finding, if applicable: Yes, see Finding 2019-004. Recommendation: We recommend that the School Corporation establish a review control to document approvals for all vouchers. Contracts or pay rate change forms should be maintained to support pay rates for all employees in the Food Service Department. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

FINDING 2021-004 Information on the federal program: Subject: Child Nutrition Cluster Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management Audit Finding: Material Weakness, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (b) 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). . . ." 7 CFR 225.15(c) states in part: "Records and claims. (1) Sponsors shall maintain accurate records justifying all meals claimed . . ." 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 cash management compliance requirement. Cause: The School Corporation's management could not locate documentation for claim reimbursements submitted to the Indiana Department of Education. 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: We selected four months during the audit period to test monthly claim reimbursements submitted. We noted for three months management was unable to locate support documentation of the claim reimbursement to support a secondary, documented review of the meals claimed prior to submission of the claim. For two of the months selected, the School Corporation could not provide underlying records of meal counts claimed for reimbursement. Identification as a repeat finding, if applicable: No. Draft Recommendation: We recommend that the School Corporation establish a review control to verify the reimbursement claims are accurate and complete prior to submission. This review should be documented, and all supporting documentation of meals claimed should be maintained. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan

FINDING 2021-005 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, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility, Special Tests and Provisions ? Verification of Free and Reduced-Price Applications Audit Finding: Material Weakness 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 Eligibility and Special Test and Provisions ? Verifications of Free and Reduced-Price Applications compliance requirements. Cause: The School Corporation's management could not locate supporting documentation for certain sample selections. 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. Questioned Costs: There were no questioned costs identified. Context: Eligibility: During the testing of 60 students selected for eligibility determinations, the School Corporation was unable to locate the application for two students to support the review of application and eligibility determination made for the 2019-2020 school year. Verification of Free and Reduced-Price Applications: During the testing of four students selected for verification of application data, the School Corporation was unable to locate verification documentation for two students obtained from the parent/guardian during the verification process to support the change in eligibility status. The lack of controls was isolated to the 2019-2020 school year. The School Corporation accepted federal waivers as a result of the COVID-19 pandemic and provided free meals to all students, therefore, eligibility and verification processes were not applicable for the 2020-2021 school year. Identification as a repeat finding, if applicable: Yes, see Finding 2019-006. Recommendation: We recommend the School Corporation's maintain all applications documenting eligibility determinations and ensure there is a documented review of the application for accuracy and completeness. Documentation for verification procedures should be maintained and reviewed by someone other than the individual making changes to eligibility status to ensure accurate determinations are made. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

FINDING 2021-006 Information on the federal program: Subject: Child Nutrition Cluster Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Program Income Audit Finding: Material Weakness, Qualified Opinion 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). . . ." 7 CFR 210.14(c) states: "Financial assurances. The school food authority shall meet the requirements of the State agency for compliance with ? 210.19(a) including any separation of records of nonprofit school food service from records of any other food service which may be operated by the school food authority as provided in paragraph (a) of this section." Draft 7 CFR 210.14(f)(3) states: "All revenue from the sale of nonprogram foods shall accrue to the nonprofit school food service account of a participating school food authority." 7 CFR 220.7(e) states in part: "Each school food authority approved to participate in the program shall enter into a written agreement with the State agency or the Department through the FNSRO, as applicable, that may be amended as necessary. . . . Such agreements shall provide that the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (12) Maintain a financial management system as prescribed by the State agency, or FNSRO where applicable; . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following. . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." Condition: 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 Program Income compliance requirement. Cause: The School Corporation's management had not developed or implemented a system of internal controls to ensure that adequate supporting documentation for program income was maintained related to the Program Income compliance requirement. Effect: The failure to establish an effective internal control system and failure to maintain and provide supporting documentation for program income prevented the determination of the School Corporation's compliance with the Program Income compliance requirement. Questioned Costs: There were no questioned costs identified. Context: During testing of four months selected during the audit period to test program income receipted to Fund 0800, Food Service fund, we noted for three months selected there was no documented, secondary review of the monthly report utilized to receipt program income. During compliance testing, it was noted that each member school of the School Corporation prepared a monthly report, based on number of meals served, and the School Corporation transferred money from the Prepaid Lunch fund (8400) to the School Lunch fund (800) based on this report. For the months selected for testing, the amount transferred per the ledger did not match the monthly reports, due to transfers made being based on a calculated number and not on actual meals served. Therefore, it could not be determined if program income was properly receipted. Section III ? Federal Award Findings and Questioned Costs (Continu+E8The lack of controls was a systemic issue, which occurred throughout the audit period. The lack of adequate supporting documentation prevented the determination of the School Corporation's compliance with the Program Income compliance requirement. Identification as a repeat finding, if applicable: Yes, see Finding 2019-003. Recommendation: We recommended that the School Corporation's management establish controls related to the grant agreement and retain adequate supporting documentation to ensure compliance with the grant agreement and the Program Income compliance requirement. We recommend there be a secondary review of program income receipted to Fund 0800 on a monthly basis and a reconciliation of Fund 8400 to the subsidiary ledger be performed monthly. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan

FINDING 2021-007 Information on the federal program: Subject: Title I Grants to Local Educational Agencies Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A180014, S010A190014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs ? Costs Principles Audit Finding: Material Weakness, Qualified Opinion 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). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 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 Activities Allowed or Unallowed, and Allowable Costs ? Costs Principles compliance requirements. Cause: The School Corporation was unable to locate adequate supporting documentation to support payroll transactions charged to Title I grants during the 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 are no questions costs identified. Context: During the testing of payroll disbursements charged to the Title I funds, the School Corporation was unable to locate pay distribution reports, payroll registers, and employee contracts for the payroll disbursements selected for testing, therefore, we were unable to test payroll controls over Title I disbursements and compliance with activities allowed or unallowed and allowable cost principles during the audit period. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure proper segregation of duties exist to maintain compliance with Title I requirements. We recommend all supporting documentation be maintained for payroll disbursements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Finding 2021-008 Information on the federal program: Subject: Title I Grants to Local Educational Agencies Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A180014, S010A190014 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Reporting, Special Tests and Provisions - Assessment System Security Audit Finding: Material Weakness 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, 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 Reporting and the Special Tests and Provisions - Assessment System Security compliance requirements. Cause: Management had not developed a system of internal controls that segregated key functions and to maintain supporting documentation for audit. 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 the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the program. Questioned Costs: There were no questioned costs identified. Context: Reporting The School Corporation had one person solely responsible for the preparation and submission of the Final Expenditure Reports. There were no review and approval controls in place to ensure that the submitted reports were accurate. Special Tests and Provisions ? Assessment System Security Training The School Corporation did not have a control in place to ensure that all School Corporation staff that were required to take the training had done so. The School Corporation could not provide any documentation to support applicable training was completed during the audit period. DraftIdentification as a repeat finding: Yes, see Finding 2019-002. 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. A secondary, documented review of the Final Expenditure Reports should be implemented and maintained. Documentation to support Assessment System Security training should be maintained to provide evidence that all applicable training was completed. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

FINDING 2021-009 Information on the federal program: Subject: COVID-19 - Education Stabilization Fund Federal Agency: Department of Education Federal Program: Elementary and Secondary School Emergency Relief (ESSER) Fund Assistance Listing Number: 84.425D Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs ? Costs Principles Audit Finding: Material Weakness, Qualified Opinion 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). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 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 Activities Allowed or Unallowed, and Allowable Costs ? Costs Principles compliance requirements. Cause: The School Corporation was unable to locate payroll information for the audit period to support these disbursements charged to the ESSER I grant fund. 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 are no questions costs identified. Context: During the testing of payroll disbursements charged to the ESSER grant award, we noted 8 instances out of 12 payroll transactions selected for testing where management was unable to locate pay distribution reports and payroll registers to test payroll controls and allowable costs during the audit period. The payroll transactions that were unable to be supported by documentation represented 35% of the Education Stabilization Fund disbursements reported on the SEFA for the audit period. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure proper segregation of duties exist to maintain compliance with COVID-19 Education Stabilization Fund requirements. We recommend all supporting documentation be maintained for payroll disbursements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Finding 2021-010 Information on the federal program: Subject: Education Stabilization Fund ? Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 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 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: The School Corporation did not have a review control in place to ensure the annual data report was reviewed by someone other than the preparer. Cause: There were not sufficient internal controls in place to ensure the Annual Data Report was reviewed by someone other than the preparer. Effect: The Annual Data Report required to be submitted could be include inaccurate or incomplete data without a documented, secondary review to ensure the reports accuracy and completeness. Questioned Costs: There were no questioned costs identified. Context: The Annual Data Report for the period of March 13, 2020 to September 30, 2020 was due to the Indiana Department of Education (IDOE) by January 21, 2021. There was no documented review by someone other than the preparer of the report to ensure the information submitted was complete and accurate. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented, secondary review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

FINDING 2019-002 Subject: Title I Grants to Local Educational Agencies - Reporting and 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 CFDA Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A150014, S010A160014, S010A170014, S010A180014 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Reporting, Special Tests and Provisions - Annual Report Card/High School Graduation Rate 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 Reporting and Special Tests and Provisions - Annual Report Card/High School Graduation Rate compliance requirements. Reporting The School Corporation had one person solely responsible for the preparation and submission of the Monthly Reimbursement Request and Final Expenditure Reports. There were no controls in place to ensure that the submitted reports were accurate. Special Tests and Provisions - Annual Report Card/High School Graduation Rate The School Corporation had one person solely responsible for entering mobility codes into the system. There were no controls in place to ensure that the submitted reports were accurate. This 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 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 the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the program. 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 2019-003 Subject: Child Nutrition Cluster - Program Income Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children CFDA Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2018, FY 2019 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Program Income Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2017-004. 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 Program Income compliance requirement. Each member school of the School Corporation prepared a monthly report, based on number of meals served, and the School Corporation transferred money from the Prepaid Lunch fund (8400) to the School Lunch fund (800) based on this report. Monthly reports were not printed or kept as supporting documentation for 20 out of the 24 months in the audit period. For those months that supporting documentation was kept, the amount transferred per the ledger did not match the monthly reports, due to transfers made being based on a calculated number and not on actual meals served. Therefore, it could not be determined if program income was properly receipted. The lack of controls was a systemic issue, which occurred throughout the audit period. The lack of adequate supporting documentation prevented the determination of the School Corporation's compliance with the Program Income compliance requirement. 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). . . ." 7 CFR 210.14(c) states: "Financial assurances. The school food authority shall meet the requirements of the State agency for compliance with ? 210.19(a) including any separation of records of nonprofit school food service from records of any other food service which may be operated by the school food authority as provided in paragraph (a) of this section." 7 CFR 210.14(f)(3) states: "All revenue from the sale of nonprogram foods shall accrue to the nonprofit school food service account of a participating school food authority." 7 CFR 220.7(e) states in part: "Each school food authority approved to participate in the program shall enter into a written agreement with the State agency or the Department through the FNSRO, as applicable, that may be amended as necessary. . . . Such agreements shall provide that the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (12) Maintain a financial management system as prescribed by the State agency, or FNSRO where applicable; . . ." 7 CFR 225.6(e) states in part: "State-Sponsor Agreement. A sponsor approved for participation in the Program must enter into a permanent written agreement with the State agency. All sponsors must agree in writing to: . . . (12) Maintain a financial management system as prescribed by the State agency; . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." Cause The School Corporation's management had not developed or implemented a system of internal controls to ensure that adequate supporting documentation for program income was maintained related to the Program Income compliance requirement. Effect The failure to establish an effective internal control system and failure to maintain and provide supporting documentation for program income prevented the determination of the School Corporation's compliance with the Program Income compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish controls related to the grant agreement and retain adequate supporting documentation to ensure compliance with the grant agreement and the Program Income compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2019-004 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program CFDA Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2018, FY 2019 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2017-003. 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 Allowable Costs/Cost Principles compliance requirement. Management of the School Corporation had not established an effective internal control system to ensure that only allowable and adequately documented disbursements were paid with the Food Service Program funds. Funds related to food service were used to pay a portion of an administrative employee's salary for fiscal years 2017-2018 and 2018-2019. The administrative employee did not maintain Personnel Activity Reports to support the distribution of a portion of their salary from the School Lunch fund. A total of $24,850 was paid out of the School Lunch fund for administrative salaries. Additionally, the School Corporation used food service funds to cover negative student lunch accounts as a direct expense. A total of $3,861 was paid directly from the School Lunch fund to cover negative student balances. The School Corporation did not have controls in place to ensure that transfers made from the School Lunch fund (800) were for the benefit of the food service program. Transfers were made from the School Lunch fund (800) to cover the negative student lunch accounts in the Prepaid Lunch fund. Thus the negative student balances were being accounted for in the School Lunch fund (800). A total of $8,862 was transferred out of the School Lunch fund to cover negative student balances. The lack of controls was a systemic issue throughout the audit period. The noncompliance was limited to the expenditures noted above. 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 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . ." Cause Management had not developed a system of internal controls that segregated key functions. Effect The failure to establish an effective internal control system, including segregation of duties, enabled noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs Known questioned costs of $37,573 were identified, as detailed in the Condition. 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 comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2019-005 Subject: Child Nutrition Cluster - Special Tests and Provisions - School Food Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children CFDA Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2018, FY 2019 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - School Food Accounts Audit Findings: Material Weakness, Modified Opinion 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 Special Tests and Provisions - School Food Accounts compliance requirement. Transfers The School Corporation did not have controls in place to ensure that transfers made from the School Lunch fund (800) were for the benefit of the food service program. Transfers were made from the School Lunch fund (800) to cover negative student accounts. Thus, the negative student balances were being accounted for in the School Lunch fund (800). Rebates The School Corporation did not have controls in place to ensure that rebates received by check were properly documented and recorded. The School Corporation was unable to provide records or supporting documentation of rebates received by check. Therefore, we are unable to determine if rebates were properly accounted for. The lack of controls and noncompliance were systemic issues throughout the audit period. The lack of supporting documentation was limited to the rebates noted above. 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). . . ." 7 CFR 210.14(c) states: "Financial assurances. The school food authority shall meet the requirements of the State agency for compliance with ? 210.19(a) including any separation of records of nonprofit school food service from records of any other food service which may be operated by the school food authority as provided in paragraph (a) of this section." 7 CFR 220.13(i) states in part: "Each State agency . . . shall establish a financial management system under which School Food Authorities shall account for all revenues and expenditures of their nonprofit school food service. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." Cause Management had not developed a system of internal controls that segregated key functions. Effect The failure to establish an effective internal control system enabled noncompliance with the grant agreement and the Special Tests and Provisions - School Food Accounts compliance requirement. 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, to ensure compliance and comply with the grant agreement and the Special Tests and Provisions - School Food Accounts compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2019-006 Subject: Child Nutrition Cluster - Special Tests and Provisions - Verification of Free and Reduced Price Applications 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): FY 2018 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Verification of Free and Reduced Price Applications 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 Special Tests and Provisions - Verification of Free and Reduced Price Applications compliance requirement. The School Corporation did not have an effective control in place to ensure that the verification process was properly performed. Of the verified applications tested during the fiscal year 2017-2018, 40 percent were not properly verified. The lack of controls and noncompliance was isolated to 2017-2018. 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). . . ." 7 CFR 245.6a states in part: ". . . (c) Verification requirement?(1) General. The local educational agency must verify eligibility of children in a sample of household applications approved for free and reduced price meal benefits for that school year. . . ." "(f)(7) Eligibility changes. Based on the verification activities, the local educational agency shall make appropriate modifications to the eligibility determinations made initially. The local educational agency must notify the household of any change. Households must be notified of any reduction in benefits in accordance with paragraph (j) of this section. Households with reduced benefits or that are longer eligible for free or reduced price meals must be notified of their right to reapply at any time with documentation of income or participation in one of the eligible programs in paragraph (a)(1) of this section. . . ." Cause Management had not developed a system of internal controls that segregated key functions. Effect The failure to establish an effective internal control system enabled noncompliance with the grant agreement and the Special Tests and Provisions - Verification of Free and Reduced Price Applications compliance requirement. 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, and comply with the grant agreement and the Special Tests and Provisions - Verification of Free and Reduced Price Applications compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2019-007 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children CFDA Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2018, FY 2019 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 requirements of the Procurement and Suspension and Debarment compliance requirement. 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 solely responsible for selecting vendors, with no oversight or review of the vendor selected. The School Corporation did not properly obtain rates or quotes from an adequate number of qualified sources. The lack of controls and noncompliance were systemic issues, 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). . . ." 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. . . ." Cause Management had not developed a system of internal controls that segregated key functions. Effect The failure to establish an effective internal control system, including segregation of duties, enabled noncompliance with the grant agreement and the procurement requirements. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment 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 a system of internal controls, including segregation of duties, and comply 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.

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