EIN: 351123801
UEI: HJA7KDYMKY78
Data as of August 20, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 13, 2026. 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 13, 2026 (23 days from today).
What is a management decision? →FINDING 2025-003 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): S010A220014, S010A230014, S010A240014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Condition and Context Eligibility for Title I is determined on the Eligible School Summary of the Tile I application. Enrollment and Poverty numbers are automatically pulled from the Indiana Department of Education's (IDOE) Official Pupil Enrollment count for each school into the Eligible School Summary page of the Tile I application. These counts that are pre-populated should be based on the School Corporation's records as of October of the prior fiscal year. One person compiled and uploaded enrollment data, including poverty status for Real Time reports, to the IDOE without a documented oversight or review process to ensure that the information was accurate. In addition, there was no documented review by the School Corporation of the enrollment and poverty counts that were pre-populated into the School Corporation's Title I grant application. 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 Due to turnover at the School Corporation, a proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 18 SALEM COMMUNITY SCHOOLS 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. Enrollment and poverty counts that are not reviewed for accuracy could result in incorrect eligibility determinations. 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 the information entered into the Title I application was accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2025-003 Finding Subject: Title I Grants to Local Educational Agencies – Eligibility Contact Person Responsible for Corrective Action: Lana Hamilton Contact Phone Number and Email Address: 812-883-4437, ext. 1005, lhamilton@salemschools.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: Due to continued turnover in the Title I administrator position, application details have not been mastered. The treasurer and current Title I administrator are continuing to learn the process through guidance from our DOE Title I specialist and what we have learned from this audit. We will continue to work together on applying for future Title I grants and for the necessary implementation of the current Title I grant. Internal control over the processes will be developed and implemented, and will be notated with a “reviewed by” signature and date. Anticipated Completion Date: 2/16/2026
FINDING 2025-004 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Annual Report Card, High School Graduation Rate Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014, S010A240014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Annual Report Card, High School Graduation Rate Audit Findings: Material Weakness, Qualified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include 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, High School Graduation Rate compliance requirement. The School Corporation must report graduation rate data for all public high schools within the School Corporation using the four-year adjusted cohort rate. To remove a student from the cohort, the School Corporation must confirm the reason for removal in writing. Additionally, required documentation for each removal type must be retained by the School Corporation. The School Corporation did not have effective internal controls in place to ensure that documentation for each removal was retained. INDIANA STATE BOARD OF ACCOUNTS 19 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Documentation of the reason for removal from the cohort was not retained for six of the eight students selected for testing. The School Corporation was unable to locate documentation for any students who exited the cohort prior to the current high school counselor taking her position. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 20 USC 7801(23)(B) states: "To remove a student from a cohort, a school or local educational agency shall require documentation, or obtain documentation from the State educational agency, to confirm that the student has transferred out, emigrated to another country, or transferred to a prison or juvenile facility, or is deceased." 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 A proper system of internal controls was not designed by management of the School Corporation to ensure documentation was retained for the required period of time. When turnover occurred, the required files were not retained or could not be located. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, proper documentation to support students' mobility was not retained or provided for audit. 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. INDIANA STATE BOARD OF ACCOUNTS 20 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 2025-004 Finding Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Annual Report Card, High School Graduation Rate Contact Person Responsible for Corrective Action: Lana Hamilton Contact Phone Number and Email Address: 812-883-4437, ext. 1005, lhamilton@salemschools.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: When removing students from the graduation cohort, files will be kept in two places. One will be a file of all transfers/removals from the cohort. That same information will be filed in each students’ file. These files will be kept at the high school. An internal control will be developed that will ensure that the proper documentation is retained. Anticipated Completion Date: 2/16/2026
FINDING 2025-005 Subject: COVID-19 - Education Stabilization Fund - Reporting 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: Reporting Audit Finding: Material Weakness Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance to ensure that reimbursement requests were properly supported. The documentation provided to the reviewer was not sufficient to detect and correct unsupported or duplicate amounts requested for reimbursement. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 21 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by management of the School Corporation to ensure reimbursement requests were properly supported. Documentation or listings provided to support the amounts requested for reimbursement were not always generated from the School Corporation's financial system, so they were not sufficient to properly detect and correct errors. 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. This could result in incorrect amounts being requested for reimbursement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management strengthen its system of internal controls to ensure reports are properly supported by the records and are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2025-005 Finding Subject: COVID-19 - Education Stabilization Fund - Reporting Contact Person Responsible for Corrective Action: Lana Hamilton Contact Phone Number and Email Address: 812-883-4437, ext. 1005, lhamilton@salemschools.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: Internal controls for reimbursement requests will include necessary documentation of expenditures from the accounting program attached to the reimbursement form for all grants. Each reimbursement request will be checked and approved by two school employees. The treasurer will keep the packet until funds are received and receipted and then the packet, with the receipt, will be filed in two places; the respective grant folder and in the monthly receipt folder. Anticipated Completion Date: 2/16/2026
2023-004
FINDING 2025-006 Subject: COVID-19 - Education Stabilization Fund - Earmarking Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number and Year (or Other Identifying Number): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Finding: Material Weakness Condition and Context Local educational agencies that receive funds under the American Rescue Plan - Elementary and Secondary School Emergency Relief Fund (ESSER III) are to reserve not less than 20 percent of the funds to address learning loss through the implementation of evidence-based interventions, such as summer learning or summer enrichment, extended day, comprehensive afterschool programs, or extended school year programs, and ensure that such interventions respond to students' academic, social, and emotional needs, and address the disproportionate impact of the coronavirus on the student subgroups. This requirement was set out in enabling legislation for the funds and further implemented in the Education Stabilization Relief Fund Application III, which the School Corporation was required to complete for its award. The Treasurer maintained a spreadsheet of learning loss expenses, but there was no documented internal control in place to ensure earmarking requirements were met. INDIANA STATE BOARD OF ACCOUNTS 22 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was isolated to the ESSER III grant noted above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The spreadsheet maintained by the Treasurer to monitor earmarking was reviewed by a second person, but that review was not documented. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of ensuring compliance with earmarking requirements. 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 with the grant agreement and the Matching, Level of Effort, and Earmarking compliance requirement and to ensure the internal controls were properly documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2025-006 Finding Subject: COVID-19 - Education Stabilization Fund - Earmarking Contact Person Responsible for Corrective Action: Lana Hamilton Contact Phone Number and Email Address: 812-883-4437, ext. 1005, lhamilton@salemschools.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: When the current treasurer was hired, the ESSER III grant was at the end of the grant cycle. The learning loss aspect was discovered toward the end of the funding. In the future, breakdowns of grant funding will be understood by the treasurer and used as a guide for expenditures, helping the grant administrators keep on track with the grant budget. In addition, internal controls will be designed to ensure compliance with requirements of grant programs, such as a secondary review by another staff member who understands the program requirements. Anticipated Completion Date: 2/16/2026
FINDING 2025-007 Subject: BRIC: Building Resilient Infrastructure and Communities - Internal Controls Federal Agency: Department of Homeland Security Federal Program: BRIC: Building Resilient Infrastructure and Communities Assistance Listings Number: 97.047 Federal Award Numbers and Years (or Other Identifying Numbers): PDMC-PJ-05-IN-2018-003, PDMC-PJ-05-IN-2018-007 Pass-Through Entity: Indiana Department of Homeland Security Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Reporting, Matching, Level of Effort, Earmarking Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 23 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-006. 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. Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Matching, Level of Effort, Earmarking The Building Resilient Infrastructure and Communities (BRIC) program expenditures were to be used for costs associated with building "safe rooms" at the School Corporation's middle school and high school. The School Corporation provided paid claims to a grant administrator, who then prepared and filed reimbursement requests on behalf of the School Corporation. The School Corporation relied on the grant administrator to determine if costs submitted on the paid claims were allowable, in conformance with the cost principles, and adhered to the cash management and matching requirements of the grant. Once the claims were provided to the grant administrator, there was no oversight or review from the School Corporation. Reporting Quarterly performance reports were required to be filed electronically with the Indiana Department of Homeland Security. The grant administrator prepared and submitted the required quarterly reports without any oversight or review from the School Corporation. 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 The School Corporation relied on a grant administrator to ensure compliance; when they became aware that additional review and oversight of the School Corporation was required, the majority of the activity for the grant was already complete. INDIANA STATE BOARD OF ACCOUNTS 24 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2025-007 Finding Subject: BRIC: Building Resilient Infrastructure and Communities – Internal Controls Contact Person Responsible for Corrective Action: Lana Hamilton Contact Phone Number and Email Address: 812-883-4437, ext. 1005, lhamilton@salemschools.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: This grant was fully expended in 2024. Going forward, the current treasurer will work closely with the grant administrator, whether within corporation or an outside source, when compiling all claims, disbursements and reporting for any given project, including BRIC programs. Internal controls will be incorporated at the Corporation level for future grants that use an outside Grant Administrator. Anticipated Completion Date: 2/16/2026
2023-006
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 26, 2024. 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 26, 2024, which was (694 days ago).
What is a management decision? →FINDING 2023-003 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management 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: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation has a property inventory policy which outlines that a property record or capital asset listing is to be maintained for items purchased with federal grant awards that exceed $5,000. The property record or capital asset listing per the School Corporation's policy is to include the following: a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), title entity, acquisition date, cost of the property, percentage of Federal participation in the project costs for the award under which the equipment was acquired, the location, use and condition of the equipment, and ultimate disposition data including the date of the disposal and sales price of the equipment. The property record or asset listing is to be maintained for assets that exceed the School Corporation's capitalization threshold. In addition, the policy states a physical inventory of the property must be taken at least once every two years. Equipment, totaling $720,578, was purchased with the grant award. All equipment purchased was properly included on the capital asset listing; however, the capital asset listing did not include all the required information. The capital asset listing was missing the following information: a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), title entity, percentage of Federal participation in the project costs for the award under which the equipment was acquired, and use of equipment. In addition, an inventory had not been completed once every two years as required. 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 21 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the School Corporation's asset listing did not include all the required information. In addition, a physical inventory was not conducted every two years. Noncompliance with the grant agreement and the compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls and develop procedures to ensure asset records include all the necessary information and that a physical inventory is conducted every two years as required. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023‐003 Finding Subject: COVID‐19 Education Stabilization Fund – Equipment and Real Property Management Summary of Finding: Incomplete information on capital assets, especially when involving federal funding, where having additional internal controls would have prevented the omissions. Contact Person Responsible for Corrective Action: Jill C. Mires Contact Phone Number and Email Address: 812‐883‐4437, jmires@salemschools.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Assets will be better recorded, with separation of duties being the first step of internal controls. Capital assets will be added by the A/P clerk and reviewed by the treasurer. Entries will include previously missing information such as where the asset was purchased and if it was purchased with federal funds, what federal grants were used and the FAIN (Federal Award ID Number). The new treasurer will work on reimplementing the 2‐year inventory process for each building that composes the SCS. Anticipated Completion Date: Dec. 31, 2024
FINDING 2023-004 Subject: COVID-19 - Education Stabilization Fund – Reporting 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): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Furthermore, the data reported for three of the six reports could not be traced back to underlying records; therefore, the accuracy and completeness of the reports could not be verified. The following errors were identified: 1. ESSER I, Year 2 Report No activity was reported to the IDOE, per the report; however, the School Corporation's records indicate expenditures for the period of $81,312. The key line item, "Addressing Physical Health and Safety - Supplies," was understated by $1,829. The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Property," was understated by $16,915. 2. ESSER II, Year 1 Report No activity was reported to the IDOE, per the report; however, the School Corporation's records indicated expenditures for the period of $275,399. The key line item, "Addressing Physical Health and Safety - Purchased Professional and Technical Services," was understated by $6,041. The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies," was understated by $104,829. 3. ESSER II, Year 2 Report Expenditures reported to the IDOE, per the report, were $361,627; however, the School Corporation's records indicated expenditures for the period of $438,739. INDIANA STATE BOARD OF ACCOUNTS 23 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Supplies," was understated $77,112. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states int 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. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 24 SALEM COMMUNITY SCHOOLS 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 a result, some data could not be traced back to the underlying records. 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 all reports submitted on behalf of the COVID-19 - Education Stabilization Fund program funds are accurate and complete. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023‐004 Finding Subject: COVID‐19 Education Stabilization Fund ‐ Reporting Summary of Finding: Federal reporting lacked internal controls, resulting in errors on federal reporting. Contact Person Responsible for Corrective Action: Jill C. Mires Contact Phone Number and Email Address: 812‐883‐4437, jmires@salemschools.us Views of Responsible Officials: We concur with the findings. Description of Corrective Action Plan: Internal controls will be added to each federal report that is submitted. They will be reviewed by a second staff member, indicated by a signature and date. Accounting expense reports and any other supporting documentation used to complete the reports will be kept internally with the reports and used by the reviewer to verify the accuracy of the reports. Anticipated Completion Date: March 2024
FINDING 2023-005 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 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. The School Corporation had not designed nor implemented a system of internal controls to ensure that construction contracts in excess of $2,000 paid from federal grant funds included a prevailing wage rate clause. One construction contract in excess of $2,000 paid from federal grant funds was identified. The one construction contract for new flooring in the amount of $712,000 was selected for testing. The contract presented for audit did not contain the required prevailing wage rate clause. In addition, certified payrolls were not submitted by the contractor to the School Corporation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 25 SALEM COMMUNITY SCHOOLS 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). . . ." 29 CFR 5.5 states in part: "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. . . . (3) Payrolls and basic records. . . . (i) (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). . . ." INDIANA STATE BOARD OF ACCOUNTS 26 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200 Appendix II states in part: In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, 'Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction'). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, construction contracts entered into did not contain the required wage rate requirements clauses nor were certified payrolls timely obtained by the School Corporation. 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 internal controls and include the wage rate requirement clause in construction contracts. In addition, certified payrolls should be obtained as required. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023‐005 Finding Subject: COVID‐19 Education Stabilization Fund – Special Tests and Provisions – Wage Rate Requirements Summary of Finding: Lack of internal controls and noncompliance in regards to installation as a part of a construction projects, especially in regards to those covered by federal funding, over $2000. (Davis Bacon rules) Contact Person Responsible for Corrective Action: Jill C. Mires Contact Phone Number and Email Address: 812‐883‐4437, jmires@salemschools.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Due to continued changes in the corporation treasurer’s position, the wage rate requirements were not mastered. The current treasurer will continue to learn about Davis Bacon requirements from IASBO, DOE and other peer groups. An addition, corporation internal controls will be added regarding this to prevent future noncompliance. All staff, from those seeking quotes to those imputing invoices, will continue to learn about the Davis Bacon requirements. Anticipated Completion Date: March 2024
FINDING 2023-006 Subject: BRIC: Building Resilient Infrastructure and Communities - Internal Controls Federal Agency: Federal Emergency Management Agency Federal Program: BRIC: Building Resilient Infrastructure and Communities Assistance Listings Number: 97.047 Federal Award Numbers and Years (or Other Identifying Numbers): PDMC-PJ-05-IN-2018-003, PDMC-PJ-05-IN-2018-007 Pass-Through Entity: Indiana Department of Homeland Security Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Reporting 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. Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management Building Resilient Infrastructure and Communities (BRIC) program expenditures were to be used for costs associated with building "safe rooms" at the School Corporation's middle school and high school. The School Corporation provided paid claims to a grant administrator, who then prepared and filed reimbursement requests on behalf of the School Corporation. The School Corporation relied on the Grant Administrator to determine if costs submitted on the paid claims were allowable, in conformance with the cost principles, and adhered to the cash management requirements of the grant. Once the claims were provided to the grant administrator there was no oversight or review from the School Corporation. Reporting Quarterly performance reports were required to be filed electronically with the Indiana Department of Homeland Security. The grant administrator prepared and submitted the required quarterly reports without any oversight or review from the School Corporation. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 28 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 29
FINDING 2023‐006 Finding Subject: BRIC: Building Resilient Infrastructure and Communities – Internal Controls Summary of Finding: Lack of internal controls for BRIC program. Contact Person Responsible for Corrective Action: Jill C. Mires Contact Phone Number and Email Address: 812‐883‐4437, jmires@salemschools.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The current treasurer will oversee all claims, disbursements, and reporting for any given project. This will be the added layer of internal controls needed when working with a grant administrator, as was done with the most recent BRIC program. Anticipated Completion Date: March 2024
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on June 22, 2022. 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 December 22, 2022, which was (1338 days ago).
What is a management decision? →FINDING 2021-003 Subject: Child Nutrition Cluster - 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 Assistance Listings Numbers: 10.553, 10.555 Federal Award Number and Year (or Other Identifying Number): FY2020 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Program Income Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit in relation to Program Income. The prior audit finding number was 2019-003. Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Program Income compliance requirement. The Food Service Director recorded program income without an oversight or review to verify that the amounts recorded were correct and complete. The lack of internal controls was isolated to fiscal year 2019-2020. 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 established a system of internal control, that segregated key functions, 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 placed the School Corporation at risk of noncompliance with the grant agreement and the Program Income compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control related to 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 2021-003 Contact Person Responsible for Corrective Action: Dr. Kim Thurston Contact Phone Number: 812-883-4437 Views of Responsible Official: Agreed Description of Corrective Action Plan: This has been corrected. As of the FY21 school year, the Assistant Superintendent reviews and signs off on amounts recorded. Anticipated Completion Date: Already completed
2019-003
FINDING 2021-004 Subject: Special Education Cluster - Activities Allowed or Unallowed; Allowable Costs/Cost Principles 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): 18611-054-PN01, 19611-054-PN01, 20611-52-PN01, 21611-52-PN01, 18619-054-PN01, 19619-054-PN01, 20619-052-PN01, 20619-054-PN01, 21619-52-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. The School Corporation was a participating member of the South Central Area Special Education Cooperative (Cooperative). The School Corporation was reimbursed by the Cooperative, based on invoices prepared and submitted by the School Treasurer for salaries and benefit costs incurred for designated staff who provided special education services at the local schools. With the exception of the last 2 months of the audit period, there was no evidence of administrative oversight of the invoice preparation and submission process by a knowledgeable individual, to ensure that the amounts invoiced were for activities allowed and that the costs were allowable. The lack of internal controls was isolated to the first 22 months of 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 established a system of internal control, that segregated key functions, that would have ensured compliance with the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control, including segregation of duties, related to the grant agreement and the Activities Allowed or Unallowed and 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.
FINDING 2021-004 Contact Person Responsible for Corrective Action: Dr. Kim Thurston Contact Phone Number: 812-883-4437 Views of Responsible Official: Agreed Description of Corrective Action Plan: This has been corrected. As of the May 2021 invoice, the Assistant Superintendent reviews and approves the invoice prior to emailing it to SCASEC. Anticipated Completion Date: Already completed
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on April 1, 2020. 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 October 1, 2020, which was (2150 days ago).
What is a management decision? →FINDING 2019-003 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program CFDA Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2018, FY2019 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Eligibility, Program Income, Special Tests and Provisions - School Food Accounts Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 19 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report in relation to Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Program Income, Special Tests and Provisions - School Food Accounts. The prior audit finding number was 2017-003. Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the following compliance requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Eligibility, Program Income, and Special Tests and Provisions - School Food Accounts. Activities Allowed or Unallowed and Allowable Costs/Cost Principles The Food Service Director was responsible for ordering items, approving and recording disbursements, and performing bank reconciliations. There was no segregation of duties, and the oversight, review, and approval process was not sufficient. Eligibility The Food Service Clerk is the sole person responsible for making the determination of eligibility for free and reduced meals. There was no evidence of an oversight, review, or approval process to ensure the accuracy of the eligibility determination. Program Income The Food Service Director recorded program income without any oversight to verify that the amounts recorded were correct and complete. Special Tests and Provisions - School Food Accounts A school food account had been established for the School Corporation; however, the oversight, review, and approval process of the activity recorded was performed in an inconsistent and ineffective manner and not adequately documented for most of the audit period. The lack of controls was a systemic issue, which occurred throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 20 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not developed a system of internal controls that segregated key functions and that would have ensured compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Eligibility, Program Income, and Special Tests and Provisions - School Food Accounts compliance requirements. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls, including segregation of duties, related to the grant agreement and the compliance requirements listed above. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2019-003 Contact Person Responsible for Corrective Action: Dr. Kim A. Thurston Contact Phone Number: 812-883-4437 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: The school district is working to establish a system of controls pertaining to the grant agreement pertaining to activities allowed or unallowed, allowable costs/cost principles, eligibility, program income, and special tests and provisions relating to school food accounts. The Assistant Superintendent will review and approve items ordered, the recording of disbursements, and the monthly bank reconciliation to see that it matches the fund report. To ensure segregation of duties, after the Food Service Clerk makes a determination of eligibility for free and reduced meals she will give the applications to the Food Service Director to review 10% of the applications and verify for accuracy. Both the Food Service Director and The Assistant Superintendent will ensure that the eligibility requirements set forth by the USDA/IDOE is accurately updated each year by the computer software company used for application determinations. The Assistant Superintendent will also review program income to verify the accuracy of the amounts recorded by the Food Service Director. Anticipated Completion Date: The anticipated completion date is May 31, 2020. Superintendent Jon D. Acton Assistant Superintendent Dr. Kim Thurston Dir. of Assessment and Program Improvement Brent Minton Dir. of Technology Erin Humphrey Board of School Trustees Mark Abbott Rodney Brough Dustin Davidson Erika Garloch Ron Haendiges Richard Trueblood Rebecca White 500 N. Harrison St, Salem, IN 47167 Phone: 812-883-4437 Fax: 812-883-1031 www.salemschools.com INDIANA STATE
2017-003
FINDING 2019-004 Subject: Child Nutrition Cluster - Procurement Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program CFDA Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2018, FY2019 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report as it relates to Procurement. The prior audit finding number was 2017-004. 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 Procurement and Suspension and Debarment compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 21 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation did not have an effective control system to ensure compliance with procurement requirements. A Procurement Plan was maintained by the Food Service Director; however, there were no controls in place to ensure procurement procedures were followed for small and micro purchases. The School Corporation did not comply with the procurement requirements for small and micropurchases during fiscal years 2017-2018 and 2018-2019. A purchase was made that fell within the small purchase threshold without obtaining competitive quotes. Several micro-purchases were made from two vendors without any apparent efforts to equitably allocate the purchases among qualified vendors during 2017-2018 and 2018-2019. The lack of controls and noncompliance were systemic issues, which occurred throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.320 states in part: "The non-Federal entity must use one of the following methods of procurement. (a) Procurement by micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micropurchase threshold (? 200.67 Micro-purchase). To the extent practicable, the non-Federal entity must distribute micro-purchases equitably among qualified suppliers. Micropurchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable. (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." INDIANA STATE BOARD OF ACCOUNTS 22 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management of the School Corporation had not developed a system of internal controls that would have ensured compliance with the procurement requirements. Effect The failure to establish an effective internal control system enabled the School Corporation to be in noncompliance with the procurement requirements and the grant agreement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish controls related to the grant agreement and the procurement 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 2019-004 Contact Person Responsible for Corrective Action: Dr. Kim A. Thurston Contact Phone Number: 812-883-4437 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: The school district is working to establish a system of controls to ensure compliance with requirements related to the grant agreement, including the procurement requirements for small and micro purchases, obtaining competitive quotes, and the procurement and suspension and debarment compliance. The Assistant Superintendent will review procurement requirements for small and micro purchases, along with the competitive quotes and the suspension and debarment compliance. The Assistant Superintendent will also review market basket quotes received for this method of procuring. This system of controls will include segregation of duties requiring the Assistant Superintendent to review and approve orders, purchases, contracts and monthly reconciliations performed by the Food Service Director. Anticipated Completion Date: The anticipated completion date is May 31, 2020.
2017-004
FINDING 2019-005 Subject: Pre Disaster Mitigation - Procurement and Suspension and Debarment Federal Agency: Department of Homeland Security Federal Program: Pre Disaster Mitigation CFDA Number: 97.047 Federal Award Number and Year (or Other Identifying Number): 14796 Pass-Through Entity: Indiana Department of Homeland Security Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement The procurement plan in place did not address all aspects of the procurement requirement and there were no controls in place to ensure procurement procedures were followed. INDIANA STATE BOARD OF ACCOUNTS 23 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Suspension and Debarment The School Corporation did not have an effective internal control system to ensure compliance with the suspension and debarment requirement. The School Corporation did not comply with the suspension and debarment requirement for 2017-2018 and 2018-2019. No procedures were performed to verify that vendors were not suspended or debarred from participation in federal programs before entering into covered transactions. Expenditures for the grant encompassed three vendors all of which had contracts over $25,000. The School Corporation did not verify that the vendors were not suspended or debarred prior to entering into covered transactions. The lack of controls and noncompliance were systemic issues, which occurred throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 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 intended to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification form that person; or (c) Adding a clause or condition to the covered transactions with that person." INDIANA STATE BOARD OF ACCOUNTS 24 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not developed a system of internal controls to ensure 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 compliance requirement could have resulted in the loss of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls, including segregation of duties, related to the grant agreement and the 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 2019-005 Contact Person Responsible for Corrective Action: Dr. Kim A. Thurston Contact Phone Number: 812-883-4437 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: Recognizing the grant Procurement in place at the time of the safe room construction did not address all aspects of the federal and state procurement requirements, the school district is establishing an internal controls system to ensure compliance regarding suspension and debarment of contractors and vendors participating in federal grant programs. These procedures will include checking the SAM Exclusions when contracting with a vendor for more than $25,000.00. Anticipated Completion Date: The anticipated completion date is May 31, 2020.
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on January 23, 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 July 23, 2019, which was (2586 days ago).
What is a management decision? →GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
2015-002, 2015-004
GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
2015-006
GSA_MIGRATION
GSA_MIGRATION
2015-005
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