Huntington County Community School Corporation

FINDING 2024-003 Subject: COVID-19 - Emergency Connectivity Fund Program - Special Tests and Provisions - Restricted Purpose Federal Agency: Federal Communications Commission Federal Program: COVID-19 - Emergency Connectivity Fund Program Assistance Listings Number: 32.009 Federal Award Number and Year (or Other Identifying Number): FY23 Compliance Requirement: Special Tests and Provisions - Restricted Purpose Audit Finding: Material Weakness Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to asset inventory and per-user limitations of the devices purchased with Emergency Connectivity Fund (ECF) Program support. The School Corporation maintained an asset inventory for the purchased equipment; however, the data was input into the asset listing, from the equipment invoice by the Information Technology department without a documented review or oversight process to prevent, or detect and correct, errors. In addition, there was not a documented review or oversight process to ensure each student only received one device. The lack of internal controls was systemic throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 22 HUNTINGTON COUNTY 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 A proper system of internal controls was not designed by management of the School Corporation to ensure that students only received one device. Evidence of another individual reviewing the student inventory listing was not provided, so there was nothing to show there was an internal control over this compliance requirement. 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. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future 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 related to the grant agreement and the Special Tests and Provisions - Restricted Purpose 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 2024-004 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): S010A210014, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 23 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not designed or implemented an effective internal control system over the Eligibility compliance requirement. Eligibility for Title I is determined on the Eligible School Summary of the Title 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 Title I application. The counts that are prepopulated 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 2021 Real Time Report data for the 2022-2023 Title I application and the October 2022 Real Time Report data for the 2023-2024 Title I Application submitted to the IDOE. Data to be submitted included student socioeconomic status information. The October 2021 and 2022 reports were available for review and the Title I Director cross checks the information in the Title I application with the October enrollment and poverty rates at each school from the Certification Summary reports; however, no other school personnel verifies the Title I numbers on the application. Additionally, the nonpublic school sends its annual enrollment and poverty counts to the Title I Director, but the Title I Director does not verify these student numbers are accurate. The Title I Director does verify the student addresses are within the district, but she does not verify the enrollment and poverty are correct. The lack of internal controls was 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). . . ." Cause A proper system of internal controls was not designed by management of the School Corporation to ensure enrollment and poverty rates were properly reported on the Title I application. Effect Without an effective internal control system, including segregation of duties, the School Corporation is at risk for noncompliance with the grant agreement and the Eligibility compliance requirement. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 24 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls over Real Time reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: Title I Grants to Local Educational Agencies - 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): S010A210014, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not designed or implemented an effective internal control system over the Matching, Level of Effort, Earmarking compliance requirement. 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. The School Corporation did have a review process in place to ensure monitoring of each required set aside; however, it was not effective in preventing or detecting noncompliance. The School Corporation did not meet the obligation to service all the homeless students in the School Corporation for fiscal year 2022-2023 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) 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 were properly recorded on the Form 9. INDIANA STATE BOARD OF ACCOUNTS 25 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 6313(c)(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 was not designed by management of the School Corporation to ensure earmarking was followed for the homeless reservation and expenditures were properly recorded on the Form 9. 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, the obligations for homeless reservation was not met and potential noncompliance could have occurred with Form 9 reporting. 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. INDIANA STATE BOARD OF ACCOUNTS 26 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-006 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Annual Report Card 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): S010A210014, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Annual Report Card, High School Graduation Rate Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to the Special Tests and Provisions - Annual Report Card compliance requirement. The School Corporation did not have effective internal controls in place to ensure that documentation regarding the reason for a student being removed from the high school graduation cohort for mobility reasons was prepared, reviewed, and retained. The Special Tests and Provisions - Annual Report Card, High School Graduation Rate compliance requirement necessitated that for students removed from the high school graduation cohort for mobility reasons there be proper written documentation to support the identified mobility code. There were 15 students selected for testing. Of the 15 students tested, 1 student did not have the required supporting documentation to substantiate removal from the cohort for mobility reasons. The lack of internal controls, noncompliance, and failure to maintain adequate supporting documentation were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 27 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 20 USC 7801(23)(B) states: "To remove a student from a cohort, a school or local educational agency shall require documentation, or obtain documentation from the State educational agency, to confirm that the student has transferred out, emigrated to another country, or transferred to a prison or juvenile facility, or is deceased." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." Cause Due to an ineffective internal control system, documentation was not maintained to provide evidence of proper removal of a student from a cohort. Effect Without the proper design or implementation of internal controls, material noncompliance cannot be capable of being prevented or detected and corrected. As a result, proper documentation to support students' mobility was not collected, retained, or provided for audit. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure mobility documentation is collected and retained for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-007 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Supplement Not Supplant 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): S010A210014, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Supplement Not Supplant Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 28 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 Special Tests and Provisions - Supplement Not Supplant compliance requirement. The School Corporation was unable to provide evidence of an internal control being in place to ensure that all Title I schools received an equitable share of the state and local funds that it would have received had they not been receiving Title I funds. The Title I applications included the methodology used to distribute state and local funds to all schools within the School Corporation and documentation was presented for audit that reflected the actual calculation. 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 was not designed by management of the School Corporation to ensure all Title I schools received an equitable share of the state and local funds that it would have received had they not been receiving Title I funds. Effect Without an effective internal control system, including segregation of duties, the School Corporation is at risk for noncompliance with the grant agreement and the Supplement Not Supplant 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 related to the grant agreement and the Special Tests and Provisions - Supplement Not Supplant compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 29 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-008 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): S010A210014, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Assessment System Security Audit Finding: Material Weakness 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 Special Tests and Provisions - Assessment System Security compliance requirement. The School Corporation was unable to provide evidence of an internal control being in place to ensure that all Title I Assessment System Security was in place. Some testing security training lists occasionally contained names which were printed and signed by the school employee taking the training. These lists were not subsequently reviewed to verify everyone who should have taken the training were included. The lists were requested to be sent to the School Corporation offices to be on file. However, they were not reviewed. 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 was not designed by management of the School Corporation to ensure required school employees took the training. INDIANA STATE BOARD OF ACCOUNTS 30 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 over the Special Test and Provisions - Assessment System Security 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 related to the grant agreement and the Special Tests and Provisions - Assessment System Security 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 2024-009 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Participation of Private School Children 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): S010A210014, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Participation of Private School Children Audit Finding: Material Weakness 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 Special Tests and Provisions - Participation of Private School Children compliance requirement. The School Corporation was unable to provide evidence of an internal control being in place to ensure that a review of all Title I Participation of Private School Children expenses was in place. 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: INDIANA STATE BOARD OF ACCOUNTS 31 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 was not designed by management of the School Corporation to ensure that an evident review of all Participation of Private School Children expenses was performed. 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 over the Special Test and Provisions - Participation of Private School Children 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 related to the grant agreement and the Special Tests and Provisions - Participation of Private School Children 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 2024-010 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles 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): 22611-027-PN01, 22611-027-ARP, 22619-027-ARP, 23611-027-PN01, 23619-027-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not established an effective internal control system related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 32 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) During our testing, there were two employees being paid a higher rate per hour for training from the Special Education grant funds. The rate was higher than the normal hourly rate. The rate for the training hours was a stipend rate set by the school for paraprofessional training. There was no authorization by the School Corporation Officials for the rate change between the regular rate and a professional development training rate. The Indiana Department of Education did not approve the separate rate. Other noncompliance involved three employees tested. The School Corporation used accounting software to process payroll. The software calculated payroll tax based on the employee year-to-date salary rather than calculating tax on gross pay per period. The lack of internal controls and noncompliance were isolated to the transactions as described 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. . . ." 34 CFR 76.700 states: "A State and a subgrantee shall comply with § 76.500, the State plan, applicable statutes, regulations, and approved applications, and shall use Federal funds in accordance with those statutes, regulations, plan, and applications." Cause The internal control system over the Allowable Costs/Cost Principles compliance requirement was not effective in preventing or detecting the overpayment of employees. INDIANA STATE BOARD OF ACCOUNTS 33 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 such, the overpayment of employees was not caught by another employee at the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure payroll applicable to the grant agreement complies with 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 2024-011 Subject: Special Education Cluster (IDEA) - Level of Effort Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States Assistance Listings Numbers: 84.027, 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): 21611-027-PN01, 22611-027-PN01, 22611-027-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Finding: Material Weakness Condition and Context Level of Effort - Individual Transactions (Vendor) The Form 9 (financial) data was submitted by the School Corporation to the Indiana Department of Education (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 vendor expenditures were posted to the correct fund, account, and object codes. The lack of internal controls was a systemic issue throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 34 HUNTINGTON COUNTY 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 There was no proper internal control in place to ensure all the nonpublic proportionate share amounts were being expended properly for Earmarking or reporting of expenditures on the Form 9 for Level of Effort. 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 such, potential noncompliance could have occurred with Form 9 reporting. 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 2024-012 Subject: Special Education Cluster (IDEA) - 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): 22611-027-PN01, 22611-027-ARP, 22619-027-ARP, 23611-027-PN01, 23619-027-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 35 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, the informal procurement method is permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. A total of eight vendors were determined to require small purchase procedures. Of the vendors, totaling $174,456, three were selected for testing. For the three vendors tested, the School Corporation did not obtain an adequate number of price or rate quotations nor was its documentation detailing the history of procurement, which must include the reason for the procurement method used. Suspension and Debarment 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 person, or adding a clause or condition to the covered transaction with that person. Upon inquiry of the School Corporation, it was determined that the School Corporation ensures all service contracts include a provision regarding suspension and debarment. The contracts are reviewed and signed by a knowledgeable member of the School Corporation. A population of one covered transaction for goods or services that equaled or exceeded $25,000 paid from the grant funds during the audit period was identified. For this transaction tested, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. 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: INDIANA STATE BOARD OF ACCOUNTS 36 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 37 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause The School Corporation did not obtain more than one quote for the small purchases that were tested. The School Corporation was not aware of the suspension and debarment requirement, so it did not check the vendor to ensure they were not suspended and debarred. 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, procurement procedures for goods and services were not adhered to, and vendors to whom payments were equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-013 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. INDIANA STATE BOARD OF ACCOUNTS 38 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 compliance requirement. The School Corporation had not designed nor implemented a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted in JotForm, the online application used by Indiana Department of Education to collect information, by one employee without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was 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). . . ." Cause Management did not develop a system of internal controls that segregated key functions over the Reports. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation is at risk of noncompliance with the grant agreement and the Reporting 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 related to the grant agreement and the Reporting 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 2024-014 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements 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 - Wage Rate Requirements compliance requirement. All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Indiana Department of Labor (DOL). Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). The School Corporation had not implemented procedures to ensure the applicable wage rate requirements were included in the contract and had also not designed or implemented policies or procedures to ensure that contractors or subcontractors submitted certified payrolls weekly. During the audit period, the School Corporation received five contractor pay applications for a construction contract subject to the Wage Rate Requirements which included labor charges that were paid with COVID-19 - Education Stabilization Fund grant awards. Of the five pay applications with labor charges, the School Corporation had obtained some (not all) certified payrolls for three pay applications and had obtained no certified payrolls for two of the pay applications. Through inquiry with the School Corporation, it was determined the certified payrolls that were obtained were obtained as the result of an Indiana Department of Education Construction Monitoring Review request. The lack of internal controls was systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 40 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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). . . ." 29 CFR 5.5 states in part: "(a) Required contract clauses. The Agency head will cause or require the contracting officer to require the contracting officer to insert in full, or (for contracts covered by the Federal Acquisition Regulation (48 CFR chapter 1)) by reference, in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the laws referenced by § 5.1, the following clauses . . . (1) Minimum wages — (i) Wage rates and fringe benefits. All laborers and mechanics employed or working upon the site of the work (or otherwise working in construction or development of the project under a development statute), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of basic hourly wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . ." (3) Records and certified payrolls — . . . (ii) Certified payroll requirements — (A) Frequency and method of submission. The contractor or subcontractor must submit weekly, for each week in which any DBA- or Related Acts-covered work is performed, certified payrolls to the [write in name of appropriate Federal agency] if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the certified payrolls to the applicant, sponsor, owner, or other entity, as the case may be, that maintains such records, for transmission to the [write in name of agency]. . . ." 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. . . . INDIANA STATE BOARD OF ACCOUNTS 41 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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. . . ." Cause Management of the School Corporation did not have an effective internal control system in place to detect noncompliance when the contractor did not provide the School Corporation with a copy of the certified payroll and statement of compliance for all construction invoices. 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, not all certified payrolls were provided to the School Corporation by the contractor. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all certified payrolls are provided to the School Corporation from the contractor. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2022-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting 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 compliance requirement. The School Corporation had not designed, nor implemented a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted in JotForm, the online application used by the Indiana Department of Education to collect information, by one employee without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was systemic throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 18 HUNTINGTON COUNTY 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 Management had not developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Reporting 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 Reporting 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 related to the grant agreement and the Reporting 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 2020-001Subject: Child Nutrition Cluster - Special Tests and Provisions - Paid Lunch EquityFederal Agency: Department of AgricultureFederal Programs: National School Lunch Program, COVID-19 - National School Lunch ProgramCFDA Number: 10.555Federal Award Numbers and Years (or Other Identifying Numbers): FY 2018-2019, FY 2019-2020Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Special Tests and Provisions - Paid Lunch EquityAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not in place at the School Corporation to ensure compliancewith requirements related to the grant agreement and the Special Tests and Provisions - Paid LunchEquity compliance requirement.In both years of the audit period, the School Corporation received a PLE Exemption; however, theFood Service Director was the only individual involved in the process of obtaining the exemptions.The lack of internal controls was a systemic issue throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Special Tests and Provisions - Paid Lunch Equity compliance requirement.EffectThe failure to establish an effective internal control system placed the School Corporation at risk ofnoncompliance with the grant agreement and the compliance requirement listed above. A lack of segregationof duties within an internal control system could have also allowed noncompliance with the compliancerequirement and allowed the misuse and mismanagement of federal funds and assets by not havingproper oversight, reviews, and approvals over the activities of the programs.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controlsto ensure compliance and comply with the grant agreement and the Special Tests and Provisions -Paid Lunch Equity compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2020-002Subject: Child Nutrition Cluster - Program IncomeFederal Agency: Department of AgricultureFederal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, School LunchProgram, COVID-19 - School Lunch Program, Summer Food Service Program forChildren, COVID-19 - Summer Food Service Program for ChildrenCFDA Numbers: 10.553, 10.555, 10.559Federal Award Numbers and Years (or Other Identifying Numbers): FY 2018-2019, FY 2019-2020Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Program IncomeAudit Findings: Material Weakness, Other MattersRepeat FindingThis is a repeat finding from the immediately prior audit report. The prior audit finding number was2018-002.Condition and ContextAn effective internal control system was not in place at the School Corporation to ensure compliancewith requirements related to the grant agreement and the Program Income compliance requirement.The School Corporation had not designed or implemented adequate policies and procedures toensure that program income was properly recorded in the financial records. The School Corporationreceipted all food service collections into the School Lunch - Prepaid Food fund and then transferred earnedincome to the School Lunch fund based on amounts from the Prepaid Liability Report, which was not thecorrect report to use. The amount transferred for earned income should have been based on the prepaidmoney used from the Meal and Revenue Report.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."7 CFR 220.7(e) states in part:"Each school food authority approved to participate in the program shall enter into a writtenagreement with the State agency or the Department through the FNSRO, as applicable, thatmay be amended as necessary. . . . Such agreements shall provide that the School Foodauthority shall, with respect to participating schools under its jurisdiction: . . .(12) Maintain a financial management system as prescribed by the State agency, orFNSRO where applicable; . . ."7 CFR 210.14(c) states:"Financial assurances. The school food authority shall meet the requirements of the Stateagency for compliance with ? 210.19(a) including any separation of records of nonprofit schoolfood service from records of any other food service which may be operated by the school foodauthority 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 thenonprofit school food service account of a participating school food authority."7 CFR 225.6(e) states in part:"State-Sponsor Agreement. A sponsor approved for participation in the Program must enterinto a permanent written agreement with the State agency. All sponsors must agree in writingto: . . .(12) Maintain a financial management system as prescribed by the State agency; . . ."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Program Income compliance requirement.EffectThe failure to establish an effective internal control system enabled material noncompliance to goundetected. Noncompliance with the grant agreement and the Program Income compliance requirementcould have resulted in the loss of federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls to ensurecompliance and comply with the grant agreement and the Program Income compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2020-003Subject: Child Nutrition Cluster - Procurement and Suspension and DebarmentFederal Agency: Department of AgricultureFederal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, School LunchProgram, COVID-19 - School Lunch Program, Summer Food Service Program forChildren, COVID-19 - Summer Food Service Program for ChildrenCFDA Numbers: 10.553, 10.555, 10.559Federal Award Numbers and Years (or Other Identifying Numbers): FY 2018-2019, FY 2019-2020Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Procurement and Suspension and DebarmentAudit Findings: Material Weakness, Other MattersRepeat FindingThis is a repeat finding from the immediately prior audit report. The prior audit finding number was2018-001.ConditionAn effective internal control system was not in place at the School Corporation to ensure compliancewith requirements related to the grant agreement and the Procurement and Suspension andDebarment compliance requirement.ProcurementThe School Corporation did not have internal controls in place to ensure that quotes for smallpurchases were obtained from qualified sources. During fiscal year 2019-2020, a purchasewas made that fell within the small purchase threshold, and the School Corporation did notobtain price or rate quotations from an adequate number of qualified sources. In addition, wewere not able to verify that the procurements provided full and open competition.The lack of internal controls and noncompliance was an isolated issue.Suspension and DebarmentThe School Corporation did not have internal controls in place to ensure that contracted vendorsthat exceeded $25,000 in the aggregate were not suspended or debarred from participationin the federal programs.The lack of internal controls was a systemic issue throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurementprocedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurementsconform 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 thoserelatively simple and informal procurement methods for securing services, supplies, orother property that do not cost more than the Simplified Acquisition Threshold. If smallpurchase procedures are used, price or rate quotations must be obtained from an adequatenumber of qualified sources. . . ."2 CFR 200.319(b) states:"The non-Federal entity must conduct procurements in a manner that prohibits the use ofstatutorily or administratively imposed state, local, or tribal geographical preferences in theevaluation of bids or proposals, except in those cases where applicable Federal statutesexpressly mandate or encourage geographic preference. Nothing in this section preemptsstate licensing laws. When contracting for architectural and engineering (A/E) services, geographiclocation may be a selection criterion provided its application leaves an appropriatenumber of qualified firms, given the nature and size of the project, to compete for the contract."2 CFR 200.318(i) states:"The non-Federal entity must maintain records sufficient to detail the history of procurement.These records will include, but are not necessarily limited to the following: rationale for themethod of procurement, selection of contract type, contractor selection or rejection, and thebasis for the contract price."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Procurement and Suspension and Debarment compliance requirement.EffectThe failure to establish an effective internal control system enabled material noncompliance to goundetected. Noncompliance with the grant agreement and the Procurement and Suspension andDebarment compliance requirement could have resulted in the loss of federal funds to the SchoolCorporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls to ensurecompliance and comply with the grant agreement and the Procurement and Suspension and Debarmentcompliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION