Crawfordsville Community School CorporationHigher Education

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 Program, School Summer Food Service Program, Fresh Fruit and Vegetable Program Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility 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 eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with eligibility requirements. 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 testing over controls for eligibility, we noted there was no formal, secondary review for the applications entered in the food service software determining eligibility. Additionally, there was no documented annual review by School Corporation personnel of the FY23 income eligibility guidelines used by the food service software. The School Corporation did formally review the FY24 income eligibility guidelines used in the food service software. 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 the grant agreement and eligibility compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

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, Fresh Fruit and Vegetable Program Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation 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: For the two small purchase method procurements sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. Additionally, the School Corporation did not perform a suspension and debarment check on the vendors. The sample items were for $76,200 and $31,639 worth of repair supplies in FY2023 and FY2024, respectively. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-003. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Additionally, we recommend management monitor annual vendor activity to ensure vendors that exceed small purchase threshold and suspension and debarment threshold in aggregate are reviewed for potential analysis and suspension and debarment checks required by federal and state regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Subject: Title I Grants to Local Educational Agencies - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010A Federal Award Numbers and Years (or Other Identifying Numbers): S010A210014, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness, Other Matters 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 200.430 states in part: (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, (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 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 principle compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: $5,705 (Known questioned costs) Context: For 5 selections, in a sample of 40 payroll transactions, the School Corporation did not have time and effort logs to support the portion of the employees’ time charged to the grant. The employees’ time was split with another federal grant, however the School Corporation did not have support for the allocation of the time charged to the Title I grant. Additionally, for three selections, the School Corporation charged a higher percentage to the Title I grant than what the time and effort log percentage showed. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-008. Recommendation: We recommend management ensure semi-annual certifications are completed for all employees charged to the grant awards at 100% and time and effort logs are maintained for all employees not charged at 100% to support work performed and charged to the grant awards. We recommend management establish a documented review by management of semi-annual certifications and time and effort logs to ensure time charged to grant awards is allowable and allocable based on work performed in accordance with grant requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers: S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." 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 Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. audit which was charged to the ESSER II (84.425D) and ESSER III (84.425U) grant awards. It was noted these capital asset acquisitions were not reported on the capital asset listing for the School Corporation as of June 30, 2024. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation update the capital asset listing at least annually to include all equipment and real property acquisitions and review for potential capital asset dispositions. The capital asset listing should include all required information to track capital asset acquisitions purchased with federal funding. Additionally, we noted the School Corporation’s capital asset listing did not contain all the required information, including the source of funding for the property, outlined in the criteria above. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers: S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200 Appendix II states in part: In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week.. . .” 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 Special Tests and Provisions – Wage Rate Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: For the three projects sampled for Davis-Bacon requirements, the contracts with the companies did not include the clauses for the federal wage rate requirements. The amount disbursed and reported on the SEFA during the audit period is $1,367,798. The School Corporation did obtain the weekly payroll reports certifications from the companies that performed renovations. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation implement a formal process to ensure the contracts including labor costs over $2,000 funded by federal awards have Davis Bacon wage rate requirement clause in written contract. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Information on the federal program: Subject: Education Stabilization Fund - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U, 84.425W Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013, S425W210015 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness, Other Matters 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 200.430 states in part: (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, (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 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 principle compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: $1,426 (Known questioned costs) Context: For 1 selection, in a sample of 40 payroll transactions, the School Corporation did not have time and effort logs to support the portion of the employees’ time charged to the grant. The employees’ time was split with another federal grant; however, the School Corporation did not have support for the allocation of the time charged to the Education Stabilization Fund grant. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-009. Recommendation: We recommend management ensure semi-annual certifications are completed for all employees charged to the grant awards at 100% and time and effort logs are maintained for all employees not charged at 100% to support work performed and charged to the grant awards. We recommend management establish a documented review by management of semi-annual certifications and time and effort logs to ensure time charged to grant awards is allowable and allocable based on work performed in accordance with grant requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

2022 ? 002 ? Child Nutrition Cluster Program Income Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: FY 2020-2021, FY 2021-2022 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters. Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: 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 200.307 states in part: ?Ordinarily program income must be deducted from total allowable costs to determine the net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise. Program income that the non-Federal entity did not anticipate at the time of the Federal award must be used to reduce the Federal award and non-Federal entity contributions rather than to increase the funds committed to the project.? Condition: During our testing, we noted the Crawfordsville Community School Corporation did not have adequate internal controls designed to ensure that program income requirements were being met. Questioned costs: Known - $620.87, Likely - $6,269.37. Known and questioned costs less than program materiality. Context: Using a statistically valid sample, CLA identified noncompliance in 2 of 60 samples tested. These related to 1) "extra money" for which support was unable to be provided to identify the source to verify it is an appropriate source of program income, and 2) a manual calculation error in the recording of one week's program income. Both of these may have been caught through an effective internal control structure, however there was no evidence for any of the selections that an appropriate control structure was in place and operating to ensure program income was properly determined and recorded. Cause: Management had not previously developed a system of internal controls that would ensure compliance with the program income compliance requirement. This was identified in the prior audit, but due to the timing of the prior audit recommendations, changes to implement an effective internal control structure did not occur until late 2022.. Effect: The Crawfordsville Community School Corporation is not in compliance with program requirements over program income. The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the federal program income compliance requirement. Noncompliance may go undetected. Repeat Finding: No. Recommendation: We recommend the Crawfordsville Community School Corporation establish a system of internal control to ensure compliance. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.

2022 ? 003 ? Child Nutrition Cluster Procurement, Suspension and Debarment Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: FY 2020-2021, FY 2021-2022 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters. Criteria: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. (2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6) Condition: During our testing, we noted the Crawfordsville Community School Corporation approval of proper employee suspension and debarment procedure policies, however the verification procedures took place after awarding the vendor?s contract. Questioned costs: None Context: Using a statistically valid sample, CLA selected 5 covered transactions for testing. All had evidence of suspension and debarment checks, however 4 of the 5 checks selected were performed after the contract/agreement date. Of these, all checks were performed within 1 week of the contract date with the exception of 1 selection, which was performed approximately 5 weeks after the contract date. Cause: Improper understanding and implementation of existing policies. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Improper understanding and implementation of existing policies caused the Crawfordsville Community School Corporation to be noncompliant with program requirements over procurement, suspension and debarment. Repeat Finding: No. Recommendation: We recommend the Crawfordsville Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts. View of Responsible Officials: There is no disagreement with the audit finding.

2022 ? 004 ? Title I Grants to Local Educational Agencies Annual Report Card HS Graduation Rate Federal Agency: U.S. Department of Education Federal Program Title: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S010A190014, S010A200014, S010A210014 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters. Criteria: LEAs must report graduation rate date for all public high schools at the school, LEA, and state levels using the four-year adjusted cohort rate and one or more extended-year adjusted cohort rates. Except as noted in the compliance supplement, only students who earn a regular high school diploma may be counted as a graduate for purposes of calculating graduation rates. To remove a student from the cohort, an LEA must confirm in writing that the student transferred out, emigrated to another country, transferred to a prison or juvenile facility, or is deceased. The LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. (ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(23), (25) (20 USC 6311(h)(1)(C)(iii)(II) and 7801(23), (25))). Condition: During our testing, we noted the Crawfordsville Community School Corporation only had issues identified with missing students, however all other mobility reasons (removed by parents, transferred out of state, deceased) were sufficiently supported. Missing students represented 2 of the 8 samples selected. For one of the students, the support provided included parent request that the student be removed due to a move, indicating that the "missing" classification may have been inappropriate. In both missing student selections, the Indiana Clearinghouse stated it had not been able to match the selected students with any child listed as missing in either the state or national law enforcement database, thus the Principal and Assistant Principal did not sign or approve the withdrawal paperwork, however the students were still removed from their cohorts. Printouts from the Clearinghouse indicated that the missing person request was initiated by the assistant principal, indicating that appropriate members of administration were involved in the review process, however as withdrawal was not ultimately approved by an administrator. Questioned costs: None Context: Using a statistically valid sample, CLA selected 8 students who were removed from their graduation cohorts. Of the 8 selections, 2 were for students removed because they were classified as missing. Cause: Improper understanding and implementation of existing policies. Effect: Possible improper students withdrawn from their graduation cohorts leading to noncompliance. Improper understanding and implementation of existing policies caused the Crawfordsville Community School Corporation to be noncompliant with program requirements over Annual Report Card High School Graduation Rates. Repeat Finding: No. Recommendation: We recommend the Crawfordsville Community School Corporation increased training for those individuals involved in student removal from cohorts to ensure that appropriate documentation is kept to justify student removal, appropriate approvals are obtained prior to student removal, and that reason for removal is consistent with documentation. View of Responsible Officials: There is no disagreement with the audit finding.

2022 ? 005 ? Title I Grants to Local Educational Agencies Assessment System Security Federal Agency: U.S. Department of Education Federal Program Title: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S010A190014, S010A200014, S010A210014 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters. Criteria: SEAs, in consultation with LEAs, are required to establish and maintain an assessment system that is valid, reliable, and consistent with relevant professional and technical standards. Within their assessment system, SEAs must have policies and procedures to maintain test security and ensure that LEAs implement those policies and procedures (Title I, Section 1111(b)(2)(B)(iii) of the ESEA (20 USC 6311(b)(2)(B)(iii))). Condition: During our testing and discussions with management, we noted the Crawfordsville Community School Corporation did not have proper controls around security assessments were not in place during period under audit. Questioned costs: None Context: Employees are require to complete certification forms acknowledging they have read, understood, and agree to adhere to the practices and procedures and that they will complete annual trainings. The Central Office should receive and review the employee forms for completeness. CLA saw evidence that these forms were prepared by employees, however there were no certifications provided by the Central Office to meet the compliance requirements in the key controls. Cause: Improper understanding and implementation of existing policies. Effect: Without proper review, employees could fail to participate in the required security assessments leading to noncompliance. Improper understanding and implementation of existing policies caused the Crawfordsville Community School Corporation to be noncompliant with program requirements over Assessment System Security. Repeat Finding: No. Recommendation: We recommend the Crawfordsville Community School Corporation adherence with internal controls and possible increased training for individuals at Central Office who are tasked with those control procedures. View of Responsible Officials: There is no disagreement with the audit finding.

2022 ? 006 ? Elementary and Secondary School Emergency Relief Fund Reporting Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425D200013, S425D210013, S425U200013, S425C200013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters Criteria: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, ""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). Condition: During our testing we noted that supporting documentation for key line items was insufficient or not provided. Proper controls around annual reporting requirements were not in place during the period under audit. Questioned costs: None Context: CLA selected the entire population of reports. 5 of the 6 reports tested contained key elements that were not supported by the supporting documentation reviewed. Cause: Improper understanding and implementation of existing policies. Effect: The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the reporting compliance requirement. Noncompliance may go undetected. Repeat Finding: No. Recommendation: We recommend the Crawfordsville Community School Corporation?s management establish a system of internal control to ensure compliance. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.

2022 ? 007 ? Special Education Cluster (IDEA) Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: 21619-58-PN01, 22619-058-PN01, S010A190014, S010A200014, S010A210014 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $150,392.06, Likely - $1,031,729.17. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 2 of 60 selections were not supported by appropriate documentation to support the amounts charged to the grants. 37 of 60 selections did not have adequate time and effort documentation. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: Yes, prior year finding ? 2020-004. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.

2022 ? 008 ? Title I Grants to Local Educational Agencies Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S010A190014, S010A200014, S010A210014 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $34,979.00, Likely - $473,241.37. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 5 of 60 selections were not supported by appropriate documentation to support the amounts charged to the grants. 37 of 60 selections did not have adequate time and effort documentation. 28 of 60 selections had variances between the recalculation of the gross wages amount and the amount charged per the payroll detail. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.

2022 ? 009 ? Elementary and Secondary School Emergency Relief Fund Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425D200013, S425D210013, S425U200013, S425C200013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $23,526.49, Likely - $1,191,366.00. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 60 of 60 selections did not have adequate time and effort documentation. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.

FINDING 2020-002 Subject: Child Nutrition Cluster - Cash Management Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children CFDA Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 18-19, FY 19-20 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit. The prior audit finding number was 2018-002. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreements and the Cash Management compliance requirement. As of April 2019, the three months average expenditure analysis was completed by the Treasurer and compared to the School Lunch fund (800) monthly cash balance (net cash resources). The analysis was reviewed and signed by the Superintendent of Schools. However, the internal control was not effective. For 11 of 24 months, the ending balance of the School Lunch fund (800) exceeded the three months average expenditures. The lack of effective 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). . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (iv) Limit its net cash resource to an amount that does not exceed three months average expenditure for its nonprofit school food service or such other amount as may be approved by the State agency; . . ." 7 CFR 210.14(b) states: "Net cash resources. The school food authority shall limit its net cash resources to an amount that does not exceed 3 months average expenditures for its nonprofit school food service or such other amount as may be approved by the State agency in accordance with ? 210.19(a)." Cause Management had not developed a system of internal controls that would have ensured compliance with the Cash Management compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance with the grant agreement and the Cash Management compliance requirement to go undetected. 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 to comply with the grant agreement and the Cash Management 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 2020-003 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children CFDA Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 18-19, FY 19-20 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Eligibility, Program Income, Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP), Special Tests and Provisions - School Food Accounts Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit regarding Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP). The prior audit finding number was 2018-002. Condition and Context 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 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Eligibility, Program Income, Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP), and Special Tests and Provisions - School Food Accounts compliance requirements. Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Program Income The School Corporation had not designed or implemented an effective internal control system to ensure that individual vendor and payroll transactions made by the food service management company were proper and agreed to the total dollar amount per the monthly billing invoice. There was no segregation of duties, such as an oversight, review, or approval process, for the individual transactions to ensure compliance requirements were met and thus a proper use of program income for the activities of the federal program. Eligibility The Administrative Assistant was responsible for ensuring the Direct Certification Reports were run per the Department of Education (DOE) guidelines. There was no evidence of an oversight, review, or approval process to ensure or verify that the Direct Certification Reports were ran, per the DOE requirements. Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP) An effective internal control system was not in place at the School Corporation related to the verification of free and reduced price applications. The documents received for verification and the results of the verification were indicated on a separate worksheet and reviewed and approved by two individuals knowledgeable of the requirement. However, during control testing, two applications did not show evidence of any oversight, review, or approval process. Special Tests and Provisions - School Food Accounts The School Corporation had not designed or implemented an effective internal control system to ensure that the amount of each rebate, discount, and credit received was individually identified on the monthly billing invoice received from the food service management company. There was no segregation of duties, such as an oversight, review, or approval process, for the amounts received to ensure compliance requirements were met for the activities of the program. The lack of effective internal controls 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). . . ." Cause Management had not developed a system of internal controls to ensure compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Eligibility, Program Income, Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP), and Special Tests and Provisions - School Food Accounts compliance requirements. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the above noted compliance requirements. 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 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Eligibility, Program Income, Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP), and Special Tests and Provisions - School Food Accounts compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2020-004 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education_Grants to States, Special Education_Preschool Grants CFDA Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 14217-060-PN01, 18611-060-PN01, 19611-060-PN01, 20611-058-PN01, 18619-060-PN01, 19619-060-PN01, 20619-058-PN01 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 2018-004. Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. The School Corporation did not maintain appropriate documentation that would accurately reflect the certification of work performed by all full-time and part-time special education personnel. 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). . . ." 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); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement to go undetected. 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 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 2020-005 Subject: Special Education Cluster (IDEA) - Matching, Level of Effort, Earmarking Federal Agency: Department of Education Federal Programs: Special Education_Grants to States, Special Education_Preschool Grants CFDA Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 14217-060-PN01, 18611-060-PN01, 19611-060-PN01, 20611-058-PN01, 18619-060-PN01, 19619-060-PN01, 20619-058-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking 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 to ensure compliance with requirements related to the grant agreement and the Matching, Level of Effort, Earmarking compliance requirement. Signed copies of the Proportionate Share Monitoring Reports were not maintained in the grant files. For grant award #18611-060-PN01/18619-060-PN01, the Treasurer reprinted copies of the reports, and the Treasurer signed the copies as of the date of inquiry by the Field Examiner. For grant award #14217-060-PN01, the Treasurer had not submitted a report for the period of July 1, 2018 to September 30, 2018, prior to inquiry by the Field Examiner. The lack of internal controls 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). . . ." Cause Management had not developed a system of internal controls to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Matching, Level of Effort, Earmarking 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, related to the grant agreement and the Matching, Level of Effort, Earmarking 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 2020-006 Subject: Title I Grants to Local Educational Agencies - Matching, Level of Effort, Earmarking Federal Agency: Department of Education Federal Programs: Title I Grants to Local Educational Agencies CFDA Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A170014, S010A180014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking 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 to ensure compliance with requirements related to the grant agreement and the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have an effective system of review over the Title I earmarking requirement to ensure that funds set aside for parental involvement and homelessness were expended in accordance with the amounts specified in the Title I grant application. The School Corporation did not meet the earmarking requirements for Parental Involvement for grant award numbers S010A170014 and S010A180014. Based on the documentation provided for Parental Involvement set-aside, the School Corporation expended $2,053 less than required for grant award number S010A170014, and $1,988 less than required for grant award number S010A180014. The lack of internal controls and noncompliance were systemic issues, which occurred throughout the entire 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 6318(a)(3) states in part: "(A) In general. Each local educational agency shall reserve at least 1 percent of its allocation under subpart 2 to assist schools to carry out the activities described in this section, except that this subparagraph shall not apply if 1 percent of such agency's allocation under subpart 2 for the fiscal year for which the determination is made is $5,000 or less. Nothing in this subparagraph shall be construed to limit local educational agencies from reserving more than 1 percent of its allocation under subpart 2 to assist schools to carry out activities described in this section. . . . (D) Use of Funds. Funds reserved under subparagraph (A) by a local educational agency shall be used to carry out activities and strategies consistent with the local educational agency's parent and family engagement policy, including not less than 1 of the following: (i) Supporting schools and nonprofit organizations in providing professional development for local educational agency and school personnel regarding parent and family engagement strategies, which may be provided jointly to teachers, principals, other school leaders, specialized instructional support personnel, paraprofessionals, early childhood educators, and parents and family members. (ii) Supporting programs that reach parents and family members at home, in the community, and at school. (iii) Disseminating information on best practices focused on parent and family engagement, especially best practices for increasing the engagement of economically disadvantaged parents and family members. (iv) Collaborating, or providing subgrants to schools to enable such schools to collaborate, with community-based or other organizations or employers with a record of success in improving and increasing parent and family engagement. (v) Engaging in any other activities and strategies that the local educational agency determines are appropriate and consistent with such agency's parent and family engagement policy." Cause Management had not developed a system of internal controls that would have ensured compliance with the Matching, Level of Effort, Earmarking compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance with the grant agreement and the Matching, Level of Effort, Earmarking compliance requirement to go undetected. 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 Matching, Level of Effort, Earmarking 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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