Information on the federal program: Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Material Noncompliance, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: (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)(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 non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week.. . .” Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: For the one project sampled for Davis-Bacon requirements, the School Corporation did not obtain the weekly payroll reports certifications from the company that performed renovations on the School Corporation’s roof. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. Additionally, the School Corporation did not have contracts with the companies that included the clauses for the federal wage rate requirements. The amount disbursed and reported on the SEFA during the audit period is $467,094. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-001. Recommendation: We recommend the School Corporation implement a formal process to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Material Noncompliance, Qualified Opinion Context: For the one project sampled for Davis-Bacon requirements, the School Corporation did not obtain the weekly payroll reports certifications from the company that performed renovations on the School Corporation’s roof. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. Additionally, the School Corporation did not have contracts with the companies that included the clauses for the federal wage rate requirements. The amount disbursed and reported on the SEFA during the audit period is $467,094. Contact Person Responsible for Corrective Action: Dawn Ray Contact Phone Number: 812.988.6601 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: Brown County Schools will require notification of certified payroll reviews be sent to us with the monthly work updates after the contractor has reviewed them for accuracy and compliance with prevailing wage requirements. Anticipated Completion Date: Immediately upon the completion of the audit.
2022-001
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 Financial reporting . . . ." 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." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($397,392 and $294,138, respectively) did not agree to the underlying expenditure records ($498,259 and $1,509,413, respectively, for the period of July 1, 2021 through June 30, 2022). Additionally, we noted that the ESSER II and ESSER III amounts reported on the Year 4 report ($400,501 and $294,129, respectively) did not agree to the underlying expenditure records ($412,324 and $287,065, respectively, for the period of July 1, 2022 through June 30, 2023). We noted that the 602 number of Full-time equivalent (FTE) positions on September 30, 2022 on the first report did not agree to the underlying records supporting number of 1,233 Full-time equivalent (FTE) positions on September 30, 2023. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($397,392 and $294,138, respectively) did not agree to the underlying expenditure records ($498,259 and $1,509,413, respectively, for the period of July 1, 2021 through June 30, 2022). Additionally, we noted that the ESSER II and ESSER III amounts reported on the Year 4 report ($400,501 and $294,129, respectively) did not agree to the underlying expenditure records ($412,324 and $287,065, respectively, for the period of July 1, 2022 through June 30, 2023). We noted that the 195 number of Full-time equivalent (FTE) positions on September 30, 2023 on the second report did not agree to the underlying records supporting number of 274 Full-time equivalent (FTE) positions on September 30, 2023. Contact Person Responsible for Corrective Action: Dawn Ray Contact Phone Number: 812.988.6601 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: We will have someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Anticipated Completion Date: Immediately upon the completion of the audit.
Information on the federal program: Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers: S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For 1 of 2 sample items tested, we noted the School Corporation expended $1,079,166 on roof renovations which was charged to the ESSER III (84.425U) grant award. It was noted these capital asset acquisitions were not reported on the capital asset listing for the School Corporation as of June 30, 2024. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation update the capital asset listing at least annually to include all equipment and real property acquisitions and review for potential capital asset dispositions. The capital asset listing should include all required information to track capital asset acquisitions purchased with federal funding. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers: S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Context: For 1 of 2 sample items tested, we noted the School Corporation expended $1,079,166 on roof renovations which was charged to the ESSER III (84.425U) grant award. It was noted these capital asset acquisitions were not reported on the capital asset listing for the School Corporation as of June 30, 2024. Contact Person Responsible for Corrective Action: Dawn Ray Contact Phone Number: 812.988.6601 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: We will have someone other than the preparer of the capital asset invoices perform a documented review prior to submission to the Capital Asset company to validate the accuracy and completeness of the items to be submitted. Anticipated Completion Date: Immediately upon the completion of the audit.
FINDING 2022-001 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 Number: 84.425U Federal Award Number and Year (or Other Identifying Numbers): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Finding: Material Weakness Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Certified contractor payrolls related to the construction project were obtained by the School Corporation with no documented review or oversight process in place to ensure their accuracy and compliance. The lack of internal 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). . . ." Cause Management had not developed a system of internal controls over the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Effect The failure to establish an effective internal control system places the School Corporation at risk of noncompliance with the grant agreement and 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, including segregation of duties, related to 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.
FINDING 2022-001 Contact Person Responsible for Corrective Action: Dawn Ray Contact Phone Number: 812-988-6601 Views of Responsible Official: Brown County Schools viewed this Internal Controls requirement as being fulfilled by Performance Services, Inc. (PSI) as part of their responsibilities as contractor for their sub-contractor?s certified payroll as it is addressed in PSI?s sub-contractor contract. The sub-contractor sends their certified payroll to PSI who verifies all information including Wage Rate requirements before rendering payment. Brown County Schools did not know that we were to complete this extra step. Description of Corrective Action Plan: Brown County Schools will require notification of certified payroll reviews be sent to us with the monthly work updates after the contractor has reviewed them for accuracy and compliance with prevailing wage requirements. Anticipated Completion Date: Effective immediately at conclusion of the 2020-2022 audit.
FINDING 2020-001Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/CostPrinciples, Program Income, Procurement and Suspension and DebarmentFederal Agency: Department of AgricultureFederal Programs: School Breakfast Program, COVID-19 School Breakfast Program,National School Lunch Program, COVID-19 National School LunchProgram, Summer Food Service Program for Children, COVID-19Summer Food Service Program for ChildrenCFDA Numbers: 10.553, 10.555, 10.559Federal Award Number and Year (or Other Identifying Number): FY 19-20Pass-Through Entity: Indiana Department of EducationCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles,Program Income, Procurement and Suspension and DebarmentAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not in place at the School Corporation to ensure compliancewith requirements related to the grant agreement and the Activities Allowed or Unallowed, AllowableCosts/Cost Principles, Program Income, and Procurement and Suspension and Debarment compliancerequirements.The School Corporation contracted with a food service management company to purchase programsupplies and services. The School Corporation did not have a process to review or approve purchasesmade by the food service management company to ensure that program funds were allowable and, therefore,proper uses of program income. Additionally, the School Corporation did not adequately monitor theinvoices or supporting documentation to ensure all goods and services were received as stated.The lack of internal controls was isolated to fiscal year 2019-2020.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed a system of internal controls that provided oversight of the foodservice management company, which would have ensured compliance with the compliance requirementslisted above.EffectThe failure to establish an effective internal control system placed the School Corporation at risk ofnoncompliance with the grant agreement and the compliance requirements listed above. A lack of segregationof duties within an internal control system could also allow the misuse and mismanagement of federalfunds and assets by not having proper oversight, reviews, and approvals over the activities of the programs.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls related tothe grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, ProgramIncome, and Procurement and Suspension and Debarment compliance requirements.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
CORRECTIVE ACTION PLANFINDING 2020-001Contact Person Responsible for Corrective Action: Julia SmithContact Phone Number: 812-988-6601x1130Views of Responsible Official:We concur with this findingDescription of Corrective Action Plan:The Foodservice Director will put in place an internal controls procedure that will ensure compliance withthe Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Program Income and Procurement,Suspension and Debarment compliance requirements The Foodservice Director will obtain copies of allexpenses billed to the school corporation by the Foodservice Management Company and have allsupporting documentation attached with two signatures verifying the allowed expenses.Anticipated Completion Date:Effective immediately at the conclusion of the 2018-2020 Audit
FINDING 2020-002Subject: Child Nutrition Cluster - Cash Management, Eligibility,Special Tests and Provisions - Paid Lunch EquityFederal Agency: Department of AgricultureFederal Programs: School Breakfast Program, COVID-19 School Breakfast Program,National School Lunch Program, COVID-19 National School LunchProgram, Summer Food Service Program for Children, COVID-19Summer Food Service Program for ChildrenCFDA Numbers: 10.553, 10.555, 10.559Federal Award Numbers and Years (or Other Identifying Numbers): FY 18-19, FY 19-20Pass-Through Entity: Indiana Department of EducationCompliance Requirements: Cash Management, Eligibility, Special Testsand Provisions - Paid Lunch EquityAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not in place at the School Corporation to ensure compliancewith requirements related to the grant agreement and the following compliance requirements:Cash ManagementAn effective internal control system was not in place at the School Corporation to ensure thatthe balance in the School Lunch fund, which represents the net cash resources, did not exceeda three-month average of School Lunch fund expenditures.EligibilityThe School Corporation had not designed or implemented adequate policies and proceduresto ensure that there was proper segregation of duties related to the direct certification ofstudents. One employee was solely responsible for uploading the direct certification list intothe School Corporation's school lunch software without an oversight or review process in placeto ensure that the information in the School Corporation's computer system for direct certifiedstudents was correct.Special Tests and Provisions - Paid Lunch EquityThe School Corporation had not designed or implemented adequate policies and proceduresto ensure that there was proper segregation of duties related to Special Tests andProvisions - Paid Lunch Equity. One employee was solely responsible for the informationentered into the Paid Lunch Equity Calculator without an oversight or review process in placeto ensure that the School Corporation complied with Paid Lunch Equity requirements.The lack of internal controls was a systemic issue throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the compliance requirements listed above.EffectThe failure to establish an effective internal control system placed the School Corporation at risk ofnoncompliance with the grant agreement and the compliance requirements listed above. A lack of segregationof duties within an internal control system could also allow the misuse and mismanagement of federalfunds and assets by not having proper oversight, reviews, and approvals over the activities of the programs.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internalcontrols to ensure compliance and comply with the grant agreement and the Cash Management, Eligibility,and Special Tests and Provisions - Paid Lunch Equity compliance requirements.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.INDIANA STATE
CORRECTIVE ACTION PLANFINDING 2020-002Contact Person Responsible for Corrective Action: Julia SmithContact Phone Number: 812-988-6601x1130Views of Responsible Official:We concur with this findingDescription of Corrective Action Plan:The Foodservice Director will put in place an internal controls procedure that will ensure segregation ofduties.Cash Management:The Director of Foodservice will make sure to create a spreadsheet and track the three-month average ofschool lunch expenditures. The spreadsheet will be given to the Administrative Assistant to verify. Bothwill sign off and it will be filed for future reference.Eligibility:The Foodservice Director will download the direct certification eligibility report and give it to theAdministrative assistant to verify that the student?s eligibility is correctly documented in the school lunchsoftware. Both will sign off and it will be filed for future reference.Special Tests and Provisions ? Paid Lunch Equity:The Foodservice Director will enter the information into the Paid Lunch Equity Calculator and give it to theAdministrative Assistant to verify. Both will sign off and it will be filed for future reference.Anticipated Completion Date:Effective immediately at the conclusion of the 2018-2020 Audit
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2016-003
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