EIN: 351100656
UEI: YQSMFKERL4P6
Data as of August 19, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 18, 2025. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by September 18, 2025, which was (336 days ago).
What is a management decision? →FINDING 2024-003 Subject: Child Nutrition Cluster - Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022 - 2023, FY 2023 - 2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. The School Corporation did not verify that all vendors with covered transactions that equaled or exceeded $25,000 were not suspended, debarred, or otherwise excluded from participation in federal award programs. The School Corporation had three covered transactions during the audit period with two different vendors. The School Corporation provided the formal contract for fiscal years 2023 and 2024 for one of the vendors that included a clause or condition to the covered transaction with that vendor. The second vendor did not have a formal contract associated with the covered transaction and the School Corporation did not check the SAM exclusions or collect a certification from that vendor. The School Corporation did not establish internal controls to ensure that someone is checking the SAM exclusions, collecting a certification, or ensuring there is a clause or condition to covered transactions. The lack of internal controls was systemic throughout the audit period. The noncompliance was isolated to 2024. 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 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: (a) Checking the SAM.gov Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation. Although the School Corporation was aware of this requirement and verified that a suspension and debarment clause was included in one of its vendor's contract, they were not aware that the requirement also applied for covered transactions without a formal contract. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation cannot ensure that the vendors paid with federal funds were eligible to participate in federal programs. Any program funds the School Corporation used to pay vendors that were suspended and debarred would be unallowable, and the awarding agency could potentially recover them. 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 vendors are not suspended, debarred, or otherwise excluded prior to entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING: 2024-003 Finding Subject: Child Nutrition Cluster - Suspension and Debarment Contact Person Responsible for Corrective Action: Kimberly Baumgartner Contact Phone Number and Email Address: 260-636-2175 baumgartnerk@centralnoble.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The School Corporation will review its internal control process for checking if a vendor is suspended or debarred prior to doing business with that vendor. All future expenditures triggering suspension and debarment requirements will include implementing the following procurement policies. The Business Manager will initial the supporting documentation for verifying a vendor to provide proof of compliance. Reference Suspension and Debarment Standards 2 CFR 180.300 Districts may not enter into contracts with entities that have been suspended or debarred from participating in contracts with federal funds. For contracts over $25,000, districts must verify a contractor is not excluded or disqualified. Contractors must be verified in one of three ways: 1. Checking the System for Award Management (SAM) (www.SAM.gov) 2. Collecting a certificate from that contractor. 3. Adding a clause or condition to the covered transaction with that contractor. (Recommended) Anticipated Completion Date: July 2025
FINDING 2024-004 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: COVID-19 - Special Education Grants to States, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-042-ARP, 22619-042-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal years 2022-2023 and 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the procurement and the suspension and debarment requirements. The Cooperative did not have adequate procedures in place to ensure that the requirements for the simplified acquisition threshold and for small purchases were met for each applicable procured good or service or to ensure that vendors were not suspended or debarred prior to entering into a covered transaction. Procurement When the value of the procurement for property or services exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a nonfederal entity, formal procurement methods are required. The SAT is typically set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold. Therefore, the SAT threshold is set at $150,000. Formal procurement methods require adherence to documented procedures and formal methods such as sealed bids or proposals. When the purchase value exceeds the micro-purchase threshold but is less than the simplified acquisition threshold, a small purchase occurs. Small purchases require documented full and open competition or a documented rationale for limited competition. For 2022-2023, the Cooperative had one vendor, with disbursements totaling $379,313, which exceeded the SAT threshold of $150,000. The Cooperative did not obtain sealed bids or competitive proposals nor was there documentation detailing the history of the procurement, which must include the reason for the procurement method used. For 2022-2023, the Cooperative had one vendor with disbursements in the amount of $55,374, which were less than the SAT threshold of $150,000 but exceeded the $50,000 micro-purchase threshold and was selected for testing. The Cooperative did not obtain price or rate quotes nor was there documentation detailing the history of the procurement, which must include the reason for the procurement method used. For 2023-2024, three vendors with disbursements totaling $175,125 were identified as being less than the simplified acquisition threshold of $150,000 but exceeding the $50,000 micropurchase threshold and were selected for testing. The Cooperative did not obtain price or rate quotes for two of the three vendors and there was no documentation detailing the history of the 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 vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the Cooperative in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the Cooperative disclosed there were not any documented internal controls or procedures. Nine covered transactions were identified. The covered transactions, totaling $803,836, were selected for testing. The Cooperative did not verify the suspension and debarment status of the tested vendors prior to payment. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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. . . . (b) Formal Procurement Methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: . . . (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction, if the conditions. . . . (2) Proposals. A procurement method in which either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. . . ." 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: (a) Checking SAM.gov 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 Cooperative noted that the ARP portion of the Special Education grant was new for 2022-2023 and 2023-2024. The ARP funding gave opportunity for types of expenditures that do not typically get expensed using Special Education funding. The transactions noted within the Condition and Context were from the ARP portion of the grant, which provided property or services that exceeded the micro-purchase threshold. Management of the Cooperative was unaware of the procurement requirements when property or services exceed the micro-purchase threshold. In addition, management of the Cooperative was unaware of the suspension and debarment requirements when a covered transaction is expected to equal or exceed $25,000. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Without following the required methods for procurement, the Cooperative could be overpaying for services. Unverified vendors to whom payments equal to or in excess of $25,000 could be suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and terms and conditions of the federal award could result in the reduction of future federal funding to the Cooperative. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Cooperative's management design and implement a system of internal controls related to procurement and suspension and debarment procedures to ensure procurement requirements are met and to ensure entities are neither suspended nor debarred, or otherwise excluded or disqualified prior to entering into any covered transactions. 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 Finding Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Contact Person Responsible for Corrective Action: Dawn Mason, Business Manager, DeKalb Co. Eastern CSD Contact Phone Number and Email Address: 260-868-2125 Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The expenditures referenced in the finding were expended from the American Rescue Plan Special Education grant funds which were fully expended during the audit period. All future expenditures triggering procurement and suspension and debarment requirements will include implementing the following procurement policies. Reference Procurement Standards 2 CFR 200.318 Districts may not enter into contracts with entities that have been suspended or debarred from participating in contracts with federal funds. For contracts over $25,000, districts must verify a contractor is not excluded or disqualified. Contractors must be verified in one of three ways: 1. Checking the System for Award Management (SAM) (www.SAM.gov) 2. Collecting a certificate from that contractor. 3. Adding a clause or condition to the covered transaction with that contractor. (Recommended) **Proper verification and documentation must be sent to the LEA for audit purposes. Methods of Procurement Where specific EDGAR/UG thresholds apply, Districts must meet baseline requirements for procurement. If State or local rules have more restrictive thresholds, the most restrictive rule must be followed. Informal Procurement Procedures 1. Micro-purchase (0-$50,000) Dekalb County Eastern CSD has self-certified micro-purchases for up to $50,000 Micro-purchases may be awarded without soliciting competitive quotes if the district considers the price to be reasonable. Quotes must be attached to the invoice/checks for proper documentation and retained by the LEA. 2. Small Purchase ($50,000 – $150,000) Three quotes are required prior to purchase unless the purchase comes from a “Sole Source” vendor. Small purchases are required to be ordered under a purchase order unless in an emergency. Additional quotes must be presented along with the purchase order prior to being approved by the LEA. Formal Procurement Procedures 1. Sealed Bids (above $150,000) Bids must be solicited from an adequate number of suppliers, providing them with sufficient response time prior to the opening of the bids. Proper advertisement and procedures must be followed per IC 5-22 and corresponding documentation must be presented to the LEA prior to any final approval or purchases being made. 2. Competitive Proposals (above $150,000) The Request for Proposal method is used for procurements in which factors other than cost play a significant role. Per IC 5-22-9, when a purchasing agent makes a written determination that the use of competitive sealed bidding is either not practicable or not advantageous to the governmental body, the purchasing agent may award a contract using this procedure instead of competitive sealed bidding. This provides a formal process for the procurement of goods and/or services for which price is not the sole factor in the selection of a vendor or vendors. Proper advertisement and procedures must be followed per IC 5-22 and corresponding documentation must be presented to the LEA prior to any final approval or purchases being made. Noncompetitive (Sole Source) All sole source procurements require adequate written justification and must be attached to the corresponding purchase order or payment. Anticipated Completion Date: All expenditures initiated after March 12, 2025
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 28, 2023. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by September 28, 2023, which was (1057 days ago).
What is a management decision? →FINDING 2022-003 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 20611-042-PN01, 20619-042-PN01, 21611-042-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 19 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for 20611-042-PN01, 20619-042-PN01, and 21611-042-PN01 grant awards could not be verified for the individual schools to verify if the minimum amount per the grant awards was expended and properly reported to the IDOE as required. The lack of internal controls and noncompliance were isolated to the 19611-042-PN01, 19619-042-PN01, 20611-042-PN01, 20619-042-PN01, and 21611-042-PN01 grant awards. 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: . . . (g) Be adequately documented. . . . " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 20 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of 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, as well as appropriately document and identify federal award expenditures to ensure compliance with 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.
Contact Person Responsible for Corrective Action: Tyler Osenbaugh Contact Phone Number: 260-636-2175 Views of Responsible Official: Agree with the finding Description of Corrective Action Plan: Central Noble will work with the Northeast Indiana Special Education Cooperative to implement the procedures detailed below. The Northeast Indiana Special Education Cooperative (NEISEC) Treasurer will reach out to member schools during the writing process of the IDEA 611 and 619 grants in order for each member school to submit their plans for their allocation of proportionate share money. NEISEC will provide the allocation amounts to each cooperative school. These submissions will include a proportionate share budget and include proportionate share staff names and any necessary information for the budget categories. The NEISEC Treasurer will then compile the proportionate share information and include on the grant submission. The LEA Treasurer will be given a copy of the grant application and budget upon approval of the grant. Any NEISEC employee being paid out of proportionate share grant funds for salary and benefits will be paid from the LEA?s financial software. The LEA Treasurer will keep a spreadsheet of employee proportionate share expenses and this spreadsheet will be updated monthly based on time and effort logs that are submitted by all cooperative schools to the LEA and NEISEC. Any employee utilizing proportionate share funds that is not an employee of NEISEC, but rather a direct employee of a member school, will be paid directly by that member school. Time and effort logs will still be submitted to the LEA and NEISEC Treasurers for these employees in order to generate a direct reimbursement from the grant fund to the member school. For any expenses for a category outside of salary and benefits, a member school will need to submit an invoice and proof of purchase for equipment, supplies, etc. to NEISEC and the LEA in order to be directly reimbursed for those proportionate share expenses. If the request was not in the initial grant budget, the member school must submit all relevant information to NEISEC in order for a grant modification to be completed. Per IDOE the grant modification must be approved first prior to purchasing the items. Time and effort logs as well as invoice and proof of payment must be sent to the LEA Treasurer and NEISEC Treasurer in order to completed the grant reimbursement requests. At the end of the grant period, any school with remaining proportionate share money will be required to complete a waiver. As of this date (2/10/2023) the LEA (Central Noble) and NEISEC are still in communication with SBOA and IDOE to review the proportionate share plan and ensure all necessary requirements will be satisfied. Anticipated Completion Date: JUL 2023
FINDING 2022-004 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 Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013 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 was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. INDIANA STATE BOARD OF ACCOUNTS 21 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) There was no signed contract between the School Corporation and the construction company for a project paid in part with federal funds. The School Corporation received quotes from the construction company for an outdoor learning center. The learning center was originally quoted at $29,000 and paid for with School Corporation funds. However, the modification of the agreement to add a roof and floor due to COVID increased the total amount of the project to $73,500. ESSER II funds were used to pay for a portion of this project. As such the entire project was subject to federal regulations, which would include a requirement to have a contract and follow wage rate requirements. As there was no contract clause and no certified payrolls were received it could not be determined if the School Corporation adhered to the wage rate requirements. The lack of internal controls and noncompliance were systemic issued 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). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full 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 acts listed in ? 5.1, the following clauses. . . . (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), 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 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. . . . INDIANA STATE BOARD OF ACCOUNTS 22 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (3) Payrolls and basic records. . . . (ii) (A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all 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 payrolls to the applicant, sponsor, or owner, as the case may be, 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. . . . (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 nonFederal 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 note less than the prevailing wages specified in 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 had not designed, nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Effect The failure to design and implement an effective internal control system, as well as adequately and timely document adherence to required requirements of federal awards, prevented the determination of the School Corporation's compliance with the Special Tests and Provisions - Wage Rate Requirements 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, as well as appropriately and timely document adherence to required requirements to ensure compliance with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Contact Person Responsible for Corrective Action: Tyler C. Osenbaugh Contact Phone Number: 260-336-0217 Views of Responsible Official: Agree with the finding Description of Corrective Action Plan: The Business Manager was unaware of the requirements under the Davis Bacon Act until 45 days after this expenditure occurred. Training attended on 3 JUN 2021 and 10 JUN 2021 on EDGAR/UGG and CARES/CRRSA Funding made the provisions clear. The Superintendent was informed of these provisions and that our previous project had violated provisions under the Davis Bacon Act. Future expenditures of federal funds for projects will be reviewed by the Business Manager and Superintendent to ensure all provisions are followed. Anticipated Completion Date: March 2023
FINDING 2022-005 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-002. Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. The School Corporation had not designed nor implemented adequate policies and procedures to ensure that program costs were supported by proper documentation, were allowable, and solely for the operation and improvement of the food service program. Out of 16 disbursements selected for testing, supporting documentation could not be provided for 3 of the disbursements totaling $23,438. These 3 disbursements were paid to the Food Service Management Company that the School Corporation had entered into a cost-reimbursement contract with to oversee the School Corporation's food service operations. Due to lack of sufficient documentation we were unable to determine if the disbursements were allowable for the federal program. The lack of internal controls, noncompliance, and failure to maintain adequate supporting documentation of program costs 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 24 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; (ii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: "Each school food authority approved to participate in the program shall enter into a written agreement with the State agency or the Department through the FNSRO, as applicable, that may be amended as necessary. . . . Such agreements shall provide that the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (1) . . . (ii) In accordance with the financial management system established under ? 220.13(i) of this part, use all revenues received by such food service only for the operation or improvement of that food service . . . (12) Maintain a financial management system as prescribed by the State agency, or FNSRO where applicable; . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls, as well as adequately document costs, prevented the determination of the School Corporation's compliance with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Questioned Costs Known questioned costs in the amount of $23,438 were identified as noted in the Condition and Context. INDIANA STATE BOARD OF ACCOUNTS 25 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Contact Person Responsible for Corrective Action: Tyler C. Osenbaugh Contact Phone Number: 260-336-0217 Views of Responsible Official: Agree with the finding Description of Corrective Action Plan: The School Food Authority and Food Service Director (Chartwells? Director of Dining Services) review and validate the supporting documentation for all food service-related purchases. The documentation, include payroll information and non-payroll expenditures, including vendor deliveries. Copies of the supporting data have been retained by the Business Manager to ensure records are available for audits. The review occurs prior to the SFA submitting for reimbursement into CNPWeb. These steps have been in place correcting the previous finding (2020-002). Future reviews will include supporting vendor (Gordon Food, Piazza, Prairie Farms) price lists in effect during the support period. The prices paid for commodities from these vendors will be compared to Chartwells Operations Ledger to ensure charges are consistent with the costs. Anticipated Completion Date: May 2023
2020-002
FINDING 2022-006 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education (IDOE) based upon meals served for the month. All four Claims tested had differences between the Claims submitted and the School Corporation's summary meal count reports. Meal counts did not match the ledgers provided by the Food Management Service Company (FMSC) nor the internally generated reports of the School Corporation. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 26 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not developed 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 system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting 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 to ensure compliance and comply with 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 2022-006 Contact Person Responsible for Corrective Action: Tyler C. Osenbaugh Contact Phone Number: 260-336-0217 Views of Responsible Official: Agree with the finding Description of Corrective Action Plan: Meal counts differed from the Meal Magic generated Z report and the Chartwells Profit and Loss statement. These meal counts are reconciled by dividing the a la carte purchases by $2.70 to equate to a meal served. Future Z reports will have the a la carte meal equivalents indicated. These figures will be reviewed and validated during the monthly meeting between School Food Authority and Food Service Director (Chartwells? Director of Dining Services). Anticipated Completion Date: April 2023
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on July 25, 2021. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by January 25, 2022, which was (1668 days ago).
What is a management decision? →FINDING 2020-002 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Program Income, Special Tests and Provisions - School Food Accounts 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, COVID-19 - Summer Food Service Program CFDA Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2018-2019, FY 2019-2020 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Program Income, Special Tests and Provisions - School Food Accounts Audit Findings: Material Weakness, Modified Opinion 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, Program Income, and Special Tests and Provisions - School Food Accounts compliance requirements. The School Corporation had not designed or implemented adequate policies and procedures to ensure that program costs were supported by proper documentation, were allowable, and solely for the operation and improvement of the food service program. The School Corporation entered a cost-reimbursement contract with a food service management company (FSMC) to oversee the School Corporation's food service operations. Twenty-one ledger lines of non-payroll related expenditures to the food service management company, which totaled $109,567, were selected for testing. Supporting documentation was presented for $106,293 of the costs invoiced. Due to the lack of documentation, we were unable to determine if the remaining costs paid, $3,274, were allowable expenditures, and, therefore, proper uses of program income for the federal programs. Additionally, we identified 26 unallowable expenditures, categorized as meals and entertainment, in the amount of $754. The total questioned costs identified for non-payroll related expenditures amounted to $4,028. In addition, we identified 24 rebates in the amount of $17,246 that were unable to be verified due to the lack of documentation. The rebates were not included in the amount considered as questioned costs. Four months of payroll related expenditures to the food service management company, which totaled $88,219, were selected for testing. Adequate supporting documentation was not presented for any of the payroll costs. Due to the lack of documentation, we were unable to determine if the payroll costs selected for testing were allowable expenditures, and, therefore, proper uses of program income for federal programs. The total questioned costs identified for payroll related expenditures amounted to $88,219. The lack of internal controls, noncompliance, and failure to maintain adequate supporting documentation of program costs 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 210.21(f) states in part: ". . . (ii)(A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department. . . ." 7 CFR 220.7(e) states in part: "Each school food authority approved to participate in the program shall enter into a written agreement with the State agency or the Department through the FNSRO, as applicable, that may be amended as necessary. . . . Such agreements shall provide that the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (1)(ii) In accordance with the financial management system established under ? 220.13(i) of this part, use all revenues received by such food service only for the operation or improvement of that food service . . . (12) Maintain a financial management system as prescribed by the State agency, or FNSRO where applicable; . . ." 7 CFR 210.14 states in part: "(a) Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under ? 210.19(a) of this part. . . . (c) Financial assurances. The school food authority shall meet the requirements of the State agency for compliance with ? 210.19(a) including any separation of records of nonprofit school food service from records of any other food service which may be operated by the school food authority as provided in paragraph (a) of this section. . . . (f)(3) All revenue from the sale of nonprogram foods shall accrue to the nonprofit school food service account of a participating school food authority. . . ." Cause Management had not developed a system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit related to the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Program Income, and Special Tests and Provisions - School Food Accounts compliance requirements. Effect The failure to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. Questioned Costs Known questioned costs in the amount of $92,247 were identified in the Condition and Context. Recommendation We recommended that the School Corporation's management establish internal controls to ensure that documentation will be maintained and made available for audit related to the grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Program Income, 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 2020-002 Contact Person Responsible for Corrective Action: Tyler Osenbaugh Contact Phone Number: 260-636-2175 We concur with the finding: Description of Corrective Action Plan: Our Food Service Director (Chartwells? Director of Dining Services) and the school Business Manager will review and validate the supporting documentation for all food service related purchases on a monthly basis. The documentation will include payroll information and non-payroll expenditures, including vendor deliveries. Copies of the supporting data will be retained by the Business Manager to ensure records are available for future audits. The review will occur prior to the monthly school board meeting and the payment of Chartwells invoice. Anticipated Completion Date: 15 JUN 2021
FINDING 2020-003 Subject: School Breakfast Program, National School Lunch Program - Program Income 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 CFDA Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2018-2019, FY 2019-2020 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Program Income Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2018-004. 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 Program Income compliance requirement. The School Corporation entered a cost-reimbursement contract with a food service management company (FSMC) to oversee the School Corporation's food service operations. The Food Service Director, an employee of the FSMC, was solely responsible for entering school lunch prices into the point of sale (POS) system. The School Corporation did not have internal controls in place to ensure that school lunch prices were properly entered into the POS system. The amounts charged for paid breakfast and paid lunch for students was not correct during the audit period. The School Corporation had not designed or implemented adequate policies and procedures to ensure that the food service program sales were properly recorded in the School Lunch fund. One individual prepared and recorded receipts with no evidence of a review or approval process to ensure that receipts generated from cafeteria sales were properly recorded. The School Corporation established a Food Service Trust fund maintained in the School Corporation accounting records, which accounted for student prepaid meal accounts. Based on sales activity reports, an amount of money identified as program income for the Child Nutrition Cluster programs was transferred to the School Lunch fund monthly. The School Corporation made a total of 16 transfers during the audit period to transfer program income from the Food Service Trust fund. One of four transfers did not agree with the sales activity report. Additionally, the monthly transfer of program income was not made for six months during the period of January 1, 2020 to June 30, 2020. This resulted in program income being understated by $57,777. 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). . . ." 7 CFR 210.14 states in part: "(a) Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under ? 210.19(a) of this part. School food authorities may use facilities, equipment, and personnel supported with nonprofit school food revenues to support a nonprofit nutrition program for the elderly, including a program funded under the Older Americans Act of 1965 (42 U.S.C. 3001 et seq.). . . . (c) Financial assurances. The school food authority shall meet the requirements of the State agency for compliance with ? 210.19(a) including any separation of records of nonprofit school food service from records of any other food service which may be operated by the school food authority as provided in paragraph (a) of this section. . . ." 7 CFR 210.14(f)(3) states: "All revenue from the sale of nonprogram foods shall accrue to the nonprofit school food service account of a participating school food authority." 7 CFR 220.7(e) states in part: "Each school food authority approved to participate in the program shall enter into a written agreement with the State agency or the Department through the FNSRO, as applicable, that may be amended as necessary. . . . Such agreements shall provide that the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (1)(ii) In accordance with the financial management system established under ? 220.13(i) of this part, use all revenues received by such food service only for the operation or improvement of that food service Except that, facilities, equipment, and personnel support with funds provided to a school food authority under this part may be used to support a nonprofit nutrition program for the elderly, including a program funded under the Older Americans Act of 1965 (42 U.S.C. 3001 et seq.); . . ." (3) Price the breakfast as a unit; . . ." When a student puts money into their individual meal account, it should not be considered income to the child nutrition program until that student goes through the lunch line and charges a meal to their account. Therefore, while money is in the student's individual account, the balance should not be included in Fund 800 School Lunch. A school should set up a clearing account with the fund number of 8400 Prepaid School Lunch Accounts, which is included in Chapter 4 of the State Board of Accounts Uniform Compliance Guidelines for Indiana Public School Corporations. When a student brings in a deposit the receipt should be recorded to fund 8400 using receipt account 1630 Special Functions. After the student has charged meals, you should disburse the amount charged from 8400 using expenditure account 31900 Other Food Services and receipt this into fund 800 using the Food Services receipt accounts 1611-1623 at the time established in a written school policy to ensure accurate monthly reporting. At this point the receipts are considered program income and should be included on any reports that are required to be completed. Also, on a monthly basis it is required that the balance of the 8400 fund be reconciled with the total of the individual meal accounts. (The School Administrator and Uniform Compliance Guidelines, February 2019) Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Program Income compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could have resulted in the loss of funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Program Income compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2020-003 Contact Person Responsible for Corrective Action: Tyler Osenbaugh Contact Phone Number: 260-636-2175 We concur with the finding: Description of Corrective Action Plan: Charging Approved Prices: The Food Service Director will continue to utilize the Paid Lunch Equity (PLE) Calculator in coordination with IDOE to determine meal prices. The meal prices will be rounded to the nearest 5 cents in accordance with USDA guidance. The Business Manager will validate the PLE calculator information and present the results for School Board approval. Once approved, the Food Service Director will input the price into our Point-of-Sale system (Meal Magic) and submit a screen captured image to the Business Manager for validation. On a periodic basis the Information Coordinator will ensure the lunch prices in Meal Magic remain unchanged. Recording Program Income: The Superintendent will designate the Food Service Manager as the second set of eyes to validate the amount for the transfer from the Food Service Trust fund to the School Lunch fund. Additionally, these transfers will be routinized to occur on a monthly basis. Anticipated Completion Date: 13 JUL 2021
2018-004
FINDING 2020-004 Subject: Child Nutrition Cluster - Procurement 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, COVID-19 - Summer Food Service Program CFDA Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2018-2019, FY 2019-2020 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion 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 Procurement and Suspension and Debarment compliance requirement. The School Corporation entered a cost-reimbursement contract with a food service management company (FSMC) to oversee the School Corporation food service operations. The School Corporation did not have policies or procedures to ensure compliance with procurement requirements to verify that the invoices submitted to the School Corporation were those actually paid by the FSMC, or to ensure that the FSMC invoices included credits for any discounts, rebates, or other credits. The School Corporation did not request, nor did the FSMC provide, documentation to verify that the invoices received by the School Corporation resulted from and contained the same invoices that were paid by the FSMC. The School Corporation also did not verify the return of discounts, rebates, or credits from the FSMC. The lack of internal controls and noncompliance were systemic issues throughout the FSMC contract period during 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 210.21(f)(1)(vi) states: "The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could have resulted in the loss of funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2020-004 Contact Person Responsible for Corrective Action: Tyler Osenbaugh Contact Phone Number: 260-636-2175 We concur with the finding: Description of Corrective Action Plan: Credits for returns, discounts and rebates are credited to Chartwells and subsequently to Central Noble Schools. Chartwells will provide the supporting records for these credits to the Business Manager for validation monthly. The Food Service Director (Chartwells? Director of Dining Services) and the school Business Manager will review and validate the supporting documentation for all food service related purchases on a monthly basis. Anticipated Completion Date: 13 JUL 2021
FINDING 2020-005 Subject: School Breakfast Program, National School Lunch Program - 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 CFDA Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2018-2019, FY 2019-2020 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management 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 Cash Management compliance requirement. The School Corporation had not designed or implemented adequate policies or procedures to ensure that the School Lunch fund monthly cash balances (net cash resources) did not exceed three months average expenditures. 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 Management had not developed a system of internal controls to ensure compliance with the grant agreement and the Cash Management 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 Cash Management compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and 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 2020-005 Contact Person Responsible for Corrective Action: Tyler Osenbaugh Contact Phone Number: 260-636-2175 We concur with the finding: Description of Corrective Action Plan: The Business Manager will calculate the three-month average expenditure for the School Lunch Fund based on the prior fiscal year. The balance will be assessed monthly during the transfer from the Food Service Trust fund to the School Lunch Fund. If the balance is projected to be above the 3-month average expenditure a spend plan will be developed for approval with IDOE. Additionally, the Business Manager will review of the PLE calculation to ensure the information is consistent with the meal charges on the Z report from Meal Magic. Anticipated Completion Date: 13 JUL 2021
FINDING 2020-006 Subject: School Breakfast Program, National School Lunch Program - Eligibility 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 CFDA Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2018-2019, FY 2019-2020 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility 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 2018-003. 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 Eligibility compliance requirement. The School Corporation entered a cost-reimbursement contract with a food service management company (FSMC) to oversee the School Corporation's food service operations. Paper applications were entered by one FSMC employee without review or oversight to ensure accurate data entry. Additionally, the electronic system determined eligibility based on the eligibility criteria entered by the FSMC. The School Corporation did not have a process or internal controls in place to ensure that the FSMC adhered to the eligibility criteria guidelines issued by the state. For fiscal year 2018-2019, the eligibility criteria was not properly entered into the electronic system to determine eligibility for paper and online applications. The School Corporation had not established a process or internal controls to ensure that direct certifications were performed at or around the beginning of the school year, three months after initial effort, and six months after initial effort. The School Corporation provided one direct certification report for audit for each school year that included all students who were directly certified. The lack of internal controls and noncompliance, except for proper input of eligibility criteria which was isolated to 2018-2019, 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 245.3(b) states in part: "Each participating local educational agency and all participating schools under its jurisdiction must adhere to the eligibility criteria specified in this part. Local educational agencies must include these eligibility criteria in their policy statement as required under ? 245.10 and it must be publicly announced in accordance with the provisions of ? 245.5. . . ." 7 CFR 245.6(a) states in part: "General requirements-content of application and descriptive materials. Each local educational agency, as defined in ? 245.2, for schools participating in the National School Lunch Program, School Breakfast Program . . . shall provide meal benefit forms for use by families in making application for free or reduced price meals or free milk for their children. . . . (3) Electronic availability. In addition to the distribution of applications and descriptive materials in paper form as provided for in this section, the local educational agency may establish a system for executing household applications electronically and using electronic signatures. The electronic submission system must comply with the disclosure requirements in this section . . ." 7 CFR 245.6(b) states in part: ". . . (3) Frequency of direct certification contacts with SNAP. . . . (ii) (A) Beginning in School Year 2011-2012, at a minimum, all local educational agencies must conduct direct certification as follows: (1) At or around the beginning of the school year; (2) Three months after the initial effort; and (3) Six months after the initial effort. (B) The information used shall be the most recent available. (iii) The names of all newly enrolled children and all children not certified for free meals shall be submitted for the direct certification required in paragraph (b)(3)(ii)(B) and paragraph (b)(3)(ii)(C) of this section. Newly enrolled children must be provided with application materials in order to alleviate a delay in receipt of free meals or free milk if direct certification for these children cannot be completed promptly upon enrollment. (iv) State agencies are encouraged to conduct direct certification more frequently to obtain information about newly enrolled children or children who may be newly certified for that program's benefits. (4) Frequency of direct certification with other programs. Local educational agencies opting to conduct direct certification activities with FDPIR or TANF should conduct such activities at or around the beginning of the school year. Obtaining information about foster, homeless, migrant, or runaway children or Head Start enrollees should be done, at a minimum, at or around the beginning of the school year and when newly enrolled children or children newly eligible for those programs are being certified." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Eligibility compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Eligibility compliance requirement could have resulted in the loss of 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 and comply with the grant agreement and the Eligibility 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 Contact Person Responsible for Corrective Action: Tyler Osenbaugh Contact Phone Number: 260-636-2175 We concur with the finding: Description of Corrective Action Plan: We will continue to utilize the functionality of Meal Magic to allow for online applications for eligibility for free and reduced meals. The Food Service Director will enter the parameters from the USDA into the Meal Magic system and provide a copy of input to the Business Manager. The Business Manager and the Information Coordinator will validate these with the guidance from USDA. The students that qualify for direct certification will be entered at the beginning of the school year and validated quarterly by the Food Service Director and validated by the Information Coordinator. Paper applications will be entered by the Food Service Director and turned over to the Information Coordinator for validation within Meal Magic. Anticipated Fall 2021
2018-003
FINDING 2020-007 Subject: School Breakfast Program, National School Lunch Program - Special Tests and Provisions - Verification of Free and Reduced Price Applications 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 CFDA Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2018-2019, FY 2019-2020 Compliance Requirement: Special Tests and Provisions - Verification of Free and Reduced Price Applications 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 2018-006. Condition and Context 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 - Verification of Free and Reduced Price Applications (NSLP) compliance requirement. The School Corporation entered a cost-reimbursement contract with a food service management company (FSMC) to oversee the School Corporation's food service operations. The Food Service Director, an employee of the FSMC, performed the verification of free and reduced-price applications with no evidence of a review or approval process monitored by the School Corporation. The verification process was performed on a predetermined percentage of applications. For fiscal year 2018-2019, one of four applications was incorrectly verified which resulted in an ineligible individual receiving benefits. The lack of internal controls was a systemic issue, which occurred throughout the audit period. The noncompliance was isolated to 2018-2019. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 245.6a(f)(7) states: "Eligibility changes. Based on the verification activities, the local educational agency shall make appropriate modifications to the eligibility determinations made initially. The local educational agency must notify the household of any change. Households must be notified of any reduction in benefits in accordance with paragraph (j) of this section. Households with reduced benefits or that are longer eligible for free or reduced price meals must be notified of their right to reapply at any time with documentation of income or participation in one of the eligible programs in paragraph (a)(1) of this section." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Special Tests and Provisions - Verification of Free and Reduced Price Applications compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could have resulted in the loss of funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with and comply with grant agreement and the Special Tests and Provisions - Verification of Free and Reduced Price Applications compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2020-007 Contact Person Responsible for Corrective Action: Tyler Osenbaugh Contact Phone Number: 260-636-2175 We concur with the finding: Description of Corrective Action Plan: The Food Service Representative will continue to verify the Special Tests and Provisions meet the threshold for Free and Reduced status. The Information Coordinator will review the USDA thresholds and validate the predetermined sample identified for verification. In the event the Food Service Representative is unable to obtain the required information from the applicant, the Information Coordinator will contact the family prior to changing our determination. Anticipated Completion Date: 1 September 2021
2018-006
FINDING 2020-008 Subject: National School Lunch Program - Special Tests and Provisions - Paid Lunch Equity Federal Agency: Department of Agriculture Federal Programs: National School Lunch Program, COVID-19 - National School Lunch Program CFDA Number: 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2018-2019, FY 2019-2020 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Paid Lunch Equity Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2018-007. 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 - Paid Lunch Equity compliance requirement. The paid lunch equity calculations for fiscal year 2018-2019 and 2019-2020 were prepared by the Food Service Director without a system of oversight, review, or approval before submission of the calculation to the Indiana Department of Education. 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 Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Special Tests and Provisions - Paid Lunch Equity 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 Special Tests and Provisions - Paid Lunch Equity compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Special Tests and Provisions - Paid Lunch Equity 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 2020-008 Contact Person Responsible for Corrective Action: Tyler Osenbaugh Contact Phone Number: 260-636-2175 We concur with the finding: Description of Corrective Action Plan: All information required for submission to IDOE, including the Paid Lunch Equity Calculator, is provided to the Business Manager for review. After the calculation has been reviewed and approved, the Food Service Director inputs the information into the IDOE portal and emails a screen shot for a comparison review to the Business Manager prior to submission. Upon approval, it is submitted into the IDOE portal and then verified a final time by the Business Manager on CNP Website. Anticipated Completion Date: 13 JUL 2021
2018-007
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on May 16, 2019. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by November 16, 2019, which was (2469 days ago).
What is a management decision? →GSA_MIGRATION
GSA_MIGRATION
2016-004
GSA_MIGRATION
GSA_MIGRATION
2016-004
GSA_MIGRATION
GSA_MIGRATION
2016-005
GSA_MIGRATION
GSA_MIGRATION
2016-006
GSA_MIGRATION
GSA_MIGRATION
2016-007
GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on February 4, 2018. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by August 4, 2018, which was (2938 days ago).
What is a management decision? →GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
Data source: This information comes from the Federal Audit Clearinghouse, the official repository of Single Audit data. All data is public domain. Verify this organization's audit history at fac.gov.
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