A.E.R.O. SPECIAL ED CO-OPLocal Government

Finding 2025-001: Untimely Submission of the 2025 Single Audit Reporting Package Significant Deficiency and noncompliance Repeat Finding: Yes (2024-001) Federal Programs: Applicable to all assistance listing numbers (ALN’s) and federal agencies (and pass-through entities) included on the schedule of expenditures of federal awards for the year ended June 30, 2025. Criteria: Uniform Guidance 2 CFR 200.512, Report Submission, requires that each organization’s audit must be completed and the data collection form and reporting package submitted within the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. Condition: The Single Audit reporting package for the Cooperative’s fiscal year ended June 30, 2025 should have been submitted to the Federal Audit Clearinghouse by March 31, 2026. Cause: The audit team experienced delays and did not have sufficient resources to complete the audit timely in addition to various delays in processing the related audit requests. Effect: The Single Audit reporting package was not received timely by the Federal Audit Clearinghouse. Questioned Costs: None. Recommendation: To ensure compliance with Federal regulations, we recommend the Cooperative develop additional steps so all elements of the Single Audit reporting package are submitted on a timely basis. View of Responsible Officials of the Auditee: The Cooperative acknowledges the finding regarding the untimely submission of the Single Audit reporting package. The delay was attributable to circumstances outside of the Cooperative’s control, specifically delays in the completion of the audit by the independent auditors. Nevertheless, the Cooperative recognizes its responsibility for ensuring compliance with federal reporting requirements. To reduce the risk of future delays, the Cooperative will enhance communication and monitoring procedures with its independent auditors throughout the audit process. Management will establish interim status meetings, monitor key audit milestones, and request periodic updates on the auditors’ progress to identify and address potential delays as early as possible. In addition, the Cooperative will document these monitoring efforts and maintain a timeline of critical reporting deadlines. Management believes these measures will strengthen oversight of the audit process and help ensure the timely submission of all required elements of the Single Audit reporting package.

Finding 2024-001: Untimely Submission of the 2024 Single Audit Reporting Package Repeat Finding: No Federal Programs: Applicable to all assistance listing numbers (ALN’s) and federal agencies (and pass-through entities) included on the schedule of expenditures of federal awards for the year ended June 30, 2024. Criteria: Uniform Guidance 2 CFR 200.512, Report Submission, requires that each organization’s audit must be completed and the data collection form and reporting package submitted within the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. Condition: The Single Audit reporting package for the Cooperative’s fiscal year ended June 30, 2024 should have been submitted to the Federal Audit Clearinghouse by March 31, 2025. Cause: The Cooperative does not have compensating controls in place over timely submission of the Single Audit reporting package. Effect: The Single Audit reporting package was not received timely by the Federal Audit Clearinghouse. Questioned Costs: None. Recommendation: To ensure compliance with Federal regulations, we recommend the Cooperative develop additional controls so all elements of the Single Audit reporting package are submitted on a timely basis. View of Responsible Officials of the Auditee: Cooperative management concurs with this finding and a response is included in the corrective action plan.

Finding 2019-001: Procurement Federal Program: Special Education Cluster awarded by the Department of Education under CFDA numbers 84.173A and 84.027A. Passed through the Illinois State Board of Education under award numbers 19-4600- 00, 18-4620-00, and 19-4620-00. Criteria: Per Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 C.F.R. ? 200, a purchase that exceeds $250,000 must be made via competitive proposals or bids unless the items being purchased are available only from a single source, there is a public exigency or emergency which requires the immediate purchase of the items, the procurement requirement was specifically waived in the grant agreement, or competition is deemed inadequate after solicitation of a number of sources. Condition: The Cooperative made a $286,999 purchase of smartboards for its classrooms without publicizing the procurement opportunity and obtaining sealed bids or competitive proposal. Instead, the Cooperative obtained informal quotes from several vendors. Cause: The Cooperative followed the State of Illinois School Code for the purchase. Under the School Code, purchases of information technology are exempt from competitive bidding/proposals and the Cooperative was unaware Federal guidelines did not also include that exemption. Potential Effect: Not publicizing procurement opportunities for large purchases to solicit competitive offers could result in the Cooperative not receiving the best price available. Questioned Cost: The difference between the amount paid and what would have been paid if competitive bids/proposals were received in response to a publicized procurement opportunity. This amount is not quantifiable. Context: The above purchase was the only one made with Federal grant funds during the fiscal year above $250,000. Recommendation: We recommend the Cooperative update its procurement practices to address differences between the State of Illinois School Code and Federal procurement regulations. Cooperative's Response: The Cooperative accepts the auditor?s finding and has created a corrective action plan.

Finding 2019-002: Subrecipient Monitoring Program: Special Education Cluster awarded by the Department of Education under CFDA numbers 84.173A and 84.027A. Passed through the Illinois State Board of Education under award numbers 19-4600- 00, 18-4620-00, and 19-4620-00. Criteria: Per Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 C.F.R. ? 200, an entity that passes through a grant award to a subrecipient must verify every subrecipient is audited as required under Uniform Guidance (Single Audit) if the subrecipient is expected to meet the Federal awards threshold. Additionally, if a subrecipient has had any deficiencies identified by an audit related to the grant funds passed through the entity, the entity is responsible for issuing a management decision letter on the finding and following up with the subrecipient to ensure the issue is correctly timely. Condition: The Cooperative did not determine if its subrecipients had Single Audits performed and did not review any Single Audit reports to determine if there were findings related to the passed through funds. Cause: The Cooperative?s procedure in prior years was to review the Federal Audit Clearinghouse to check for the Single Audits of its subrecipients. However, the site was down for a time and the Cooperative was unaware it was online again. The Cooperative also had not updated its procedures to address the issue of the site being down. Potential Effect: Not verifying subrecipients are obtaining required audits of grant funds could cause the Cooperative to miss a noncompliance issue at a subrecipient that could impact the grant funds the Cooperative is passing through. Questioned Cost: None Context: The Cooperative has 11 subrecipients. Recommendation: We recommend the Cooperative update its procedures to require each subrecipient to confirm at the end of each fiscal year if it will require a Single Audit and that the Cooperative obtain the Single Audits of all the subrecipients that are required to have one performed. The updated procedures should include requesting a copy of the Single Audit from the subrecipient if the Federal Audit Clearinghouse site is down. Cooperative's Response: The Cooperative accepts the auditor?s finding and has created a corrective action plan.