Lake Station Community Schools

FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425C Federal Award Number and Year (or Other Identifying Number): S425C200018 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting 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 Reporting compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 19 LAKE STATION COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation completed three annual Elementary and Secondary School Emergency Relief (ESSER) and two Governor's Emergency Education Relief (GEER) annual Data Collection reports (Reports) during the audit period. Data on one report, the GEER I, Year 1 annual report, did not agree to unit's ledger. The expenditures reported on the GEER I, Year 1 annual report were $202,500; however, the School Corporation had no expenditures from the GEER fund during the year 1 reporting period. The lack of internal controls and noncompliance were isolated to the GEER I, Year 1 annual report. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 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." Cause Management had not established a system of internal controls that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system 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. INDIANA STATE BOARD OF ACCOUNTS 20 LAKE STATION COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 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 2022-003 Subject: COVID-19 ? Education Stabilization Fund - Reporting Person Responsible for Corrective Action: Tammy Whisenant ? 219-962-1159 Views of Responsible Official: We concur with the finding. I have viewed and acknowledge the discrepancies listed. However, as I am new to my position, I am unable to determine the cause of the discrepancies. Personnel responsible for these areas assumed responsibilities just prior to and/or after this audit period commenced. Description of Corrective Action Plan: The corrective action will include: 1) Assess current assignments and identify opportunities to implement multiple level of review and verification. 2) Continue improved training, education and professional development of personnel responsible for financial transactions and reporting relating to federal programs. 3) Improved use of technology-based financial systems to ensure effectiveness and accuracy of financial transactions and reporting for federal programs. Anticipated Completion Date: An assessment of actions, needs and a plan will be completed by April 30, 2023; with an implementation to occurring by June 30, 2023. ________________________________ Tammy Whisenant, Director of Finance/Treasurer Lake Station Community Schools February 28, 2023

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