Maywood-Melrose Park-Broadview School District 89Local Government

4. Project No.: 24-4210-00, 25-4210-00, 24-4299-00, 24-4220-00, 25-4220-00, 25-4240-24, 25-4240-25 5. AL No.: 10.553, 10.555, 10.582 6. Passed Through: Illinois State Board of Education 7. Federal Agency: Department of Education 8. Criteria or specific requirement (including statutory, regulatory, or other citation) Expenditures made under the Child Nutrition Cluster are required to be for allowable activities and conform with the Basic Guidelines prescribed in 2 CFR Part 200.402 through .408 (be necessary and reasonable, be accorded consistent treatment, be adequately documented, etc.) 9. Condition It was noted during the audit that ineligible expenditures were charged to the food service expenditure function. These expenditures were for a back-to-school picnic and consisted of backpacks with school supplies that were provided to students, as well as a lunch provided to new teachers in June 2025. These expenditures should not have been charged to the food service function in the District’s general ledger system. 10. Questioned Costs No reportable questioned costs noted 11. Context The District did not have adequate controls in place to ensure expenditures recorded under the Child Nutrition Cluster account codes were for allowable activities. 12. Effect The incorrectly coded expenditures do not impact the reimbursement received by the District due to the Child Nutrition Cluster being an open-ended entitlement grant, meaning they provide reimbursements based on the number of eligible meals served rather than all food service expenditures incurred. However, incorrectly charging expenditures to the food service function can result in District overstating the expenditures charged to food service and reporting incorrect profit or loss from the food service program. 13. Cause The lack of proper review and approval processes for invoice entry and payment, led to errounously charging expenditures to the food service function. 14. Recommendation It is recommended that the school district implement stricter controls and training to ensure that all expenditures charged to the CNC grant are eligible and directly related to child nutrition programs. Additionally, the district should review and reallocate any ineligible expenditures identified during the audit. 15. Management's response The district is reviewing all expenditures monthly to ensure all of them are recorded with the proper account code. Any changes needed will get a journal entry through the Proviso Treasurer’s Office.

1. FINDING NUMBER:14 2024 - 004 2. THIS FINDING IS: X New Repeat from Prior year? Year originally reported? 3. Federal Program Name and Year: Child Nutrition Cluster - PY 2024 and PY 2023 4. Project No.: 24-4220-00, 24-4210-00, 24-4240-24, 23-4220-00, 23-4210-00 5. AL No.: 10.553, 10.555, 10.582 6. Passed Through: Illinois State Board of Education 7. Federal Agency: Department of Education 8. Criteria or specific requirement (including statutory, regulatory, or other citation) Expenditures made under the Child Nutrition Cluster are required to be for allowable activities and conform with the Basic Guidelines prescribed in 2 CFR Part 200.402 through .408 (be necessary and reasonable, be accorded conssitent treatment, be adequately documented, etc.) 9. Condition The District has a contract with Open Kitchens for serving meals under the Child Nutrition Cluster. In early fiscal year 2024, the District received notice that the method of payment to this vendor was to change to ACH. After further correspondence, the District remitted an ACH payment for three months of services for $936,828. The District subsequently discovered that the ACH was remitted to a fraudulent vendor. 10. Questioned Costs Questioned costs related to the finding $936,828. 11. Context Based upon the testing procedures performed this appears to be an isolated instance. 12. Effect The District remmitted $936,828 to an unknown and fraudulent vendor. The District was not able to recover these funds. 13. Cause The District's internal controls failed to detect that the vendor was fraudulent. 14. Recommendation We recommend that the District implement stronger internal controls around vendor payment approvals, such as a change in payment method, to ensure that process of approving new forms of payment for vendors is not occurring with outside parties. 15. Management's response The district’s plan is any request through ACH will first get a call to the accounts receivable department at the company to ensure this is the proper way of making payment. The district will also follow up with a second call to our account rep to verify that the information is correct. The original payment to the vendor will be a small portion of the payment to verify the information. After this payment, a call will be made to accounts receivable to ensure payment.

1. FINDING NUMBER:14 2024 - 005 2. THIS FINDING IS: X New Repeat from Prior year? Year originally reported? 3. Federal Program Name and Year: Child Nutrition Cluster - PY 2024 and PY 2023 4. Project No.: 24-4220-00, 24-4210-00, 24-4240-24, 23-4220-00, 23-4210-00 5. AL No.: 10.553, 10.555, 10.582 6. Passed Through: Illinois State Board of Education 7. Federal Agency: Department of Education 8. Criteria or specific requirement (including statutory, regulatory, or other citation) Expenditures made under the Child Nutrition Cluster are required to be for allowable activities and conform with the Basic Guidelines prescribed in 2 CFR Part 200.402 through .408 (be necessary and reasonable, be accorded consistent treatment, be adequately documented, etc.) 9. Condition It was noted during the audit that ineligible expenditures were charged to the food service expenditure function. These expenditures were for a back-to-school picnic and consisted of backpacks with school supplies that were provided to students. These expenditures should not have been charged to the food service function in the District’s general ledger system. 10. Questioned Costs No reportable questioned costs noted 11. Context Based upon the testing procedures performed this appears to be an isolated instance. 12. Effect The incorrectly coded expenditures do not impact the reimbursement received by the District due to the Child Nutrition Cluster being an open-ended entitlement grant, meaning they provide reimbursements based on the number of eligible meals served rather than all food service expenditures incurred. However, incorrectly charging expenditures to the food service function can result in District overstating the expenditures charged to food service and reporting incorrect profit or loss from the food service program. 13. Cause The lack of proper review and approval processes for invoice entry and payment, led to errounously charging expenditures to the food service function. 14. Recommendation It is recommended that the school district implement stricter controls and training to ensure that all expenditures charged to the CNC grant are eligible and directly related to child nutrition programs. Additionally, the district should review and reallocate any ineligible expenditures identified during the audit. 15. Management's response The district is reviewing all expenditures monthly to ensure all of them are recorded with the proper account code. Any changes needed will get a journal entry through the Proviso Treasurer’s Office.

1. FINDING NUMBER:14 2024 - 006 2. THIS FINDING IS: X New Repeat from Prior year? Year originally reported? 3. Federal Program Name and Year: Education Stabilization Fund - PY 2023 4. Project No.: 23-4998-E3 5. AL No.: 84.425 6. Passed Through: Illinois State Board of Education 7. Federal Agency: Department of Education 8. Criteria or specific requirement (including statutory, regulatory, or other citation) According to 2 CFR Part 200.402 through 200.408, expenditures must be recorded in the period in which they are incurred and must meet the criteria of being necessary, reasonable, and adequately documented. 9. Condition Audit procedures identified that the District claimed $2,097,350 of expenditures on their June 30, 2024 reimbursement claim submitted to the Ilinois State Board of Education, however these expenditures were not received and paid by the District until July/August 2024. 10. Questioned Costs No reportable questioned costs were identified as the District did incur allowable costs in July/August of 2024 that were within the approved federal award agreement. 11. Context Based upon the review of total expenditures claimed under the federal award and the results of testing procedures performed this appears to be an isolated instance. 12. Effect The District did not incur the cost associated with the allowable cost claimed until July/August of 2024. 13. Cause The District's internal controls failed to detect that the expenditures claimed during a reimbursement request was not paid by the District. 14. Recommendation We recommend that the District perform a review of supporting documentation for expenditures claimed during a reimbursement request to ensure that expenditures claimed for reimbursement are for allowable costs that are within the approved federal award agreement and incurred within a reasonable period of time from the reimbursment request. 15. Management's response The district performs a review of supporting documentation for expenditures claimed during a reimbursement request to ensure that expenditures claimed for reimbursement occurred during the fiscal year for which they are being claimed.

1. FINDING NUMBER:14 2024 - 007 2. THIS FINDING IS: X New Repeat from Prior year? Year originally reported? 3. Federal Program Name and Year: Education Stabilization Fund - PY 2023 4. Project No.: 23-4998-E3 5. AL No.: 84.425 6. Passed Through: Illinois State Board of Education 7. Federal Agency: Department of Education 8. Criteria or specific requirement (including statutory, regulatory, or other citation) According to 2 CFR §200.303 (Internal Controls), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 9. Condition BT noted, during the review of ESSER expenditures, that the District paid the vendor for duplicate invoices. The erroneous invoice passed through all necessary controls, including purchase order/invoice review and approval to payment approval, resulting in the invoice being paid twice to the vendor for a single service. BT noted the total suspected duplicated invoices to be $2,955.67. 10. Questioned Costs No reportable questioned costs noted 11. Context During our audit of allowable activities, two separate instances of duplicated invoices were identified from a stratified sample size of forty. The sample was deemed not statistically valid. 12. Effect The client incurred unnecessary expenses by paying vendors twice for the same service, which could result in financial losses and potential non-compliance with Federal regulations. 13. Cause The District's internal controls failed to identify and prevent the payment of duplicate invoices. 14. Recommendation We recommend that the client implement stronger internal controls over the disbursement process. This includes establishing a review and approval process for all invoices before payment, implementing software controls to detect duplicate invoices, and providing training to staff on proper invoice processing procedures to minimize typographical errors. 15. Management's response Moving forward, our accounts payable coordinator will not adjust invoice numbers in IVEE and instead check the general ledger to ensure payment for that invoice has not already been made. Business Manager will perform a review of the list of bills to ensure there are no duplicate payments.

1. FINDING NUMBER:14 2023 - 003 2. THIS FINDING IS: X New Repeat from Prior year? Year originally reported? 3. Federal Program Name and Year: Elementary and Secondary School Emergency Relief (ESSER) Fund - PY 2023 4. Project No.: 23-4998-E3 5. AL No.: 84.425 6. Passed Through: Illinois State Board of Education 7. Federal Agency: Department of Education 8. Criteria or specific requirement (including statutory, regulatory, or other citation) The District is required to effectively operate internal controls to ensure that expenditures claimed under the Education Stabilization Fund are for Activities Allowed under the award. 9. Condition15 Audit procedures identified that during fiscal year 2023, the District claimed four construction related invoices that amounted to $1,257,867 of ESSER III award expenditures that were previously claimed under fiscal year 2022 ESSER award reimbursement claims and were reported on the fiscal year 2022 Schedule of Expenditures of Federal Awards. The District was able to identify alternate invoices that where for allowable costs within the existing grant agreement and were not previously claimed. The District's internal controls did not initially identify that the same expenditure was claimed twice under the federal award for reimbursement. 10. Questioned Costs16 No reportable questioned costs were identified as the District provided alternate invoices that were allowable within the approved federal award agreement and were not previously claimed. 11. Context17 Based upon the testing procedure performed this appears to be an isolated instance. 12. Effect The District requested reimbursement of $1,257,867 in ESSER expenditures that were previously claimed for reimbursement during fiscal year 2022 which initially resulted in the same expenditure being used for two reimbursement requests. The District was able to identify alternate expenditures that were allowable under the award agreement to avoid questioned costs under the award. 13. Cause The District's internal controls failed to detect that the expenditures claimed have already been submitted for reimbursement in prior fiscal year. 14. Recommendation We recommend that the District perform a review of supporting documentation for expenditures claimed during a reimbursement request to ensure that expenditures claimed for reimbursement are for allowable costs that have not been previously claimed for reimbursement. 15. Management's response18 See Corrective Action Plan. 14 See footnote 11. 15 Include facts that support the deficiency identified on the audit finding (§200.516 (b)(3)). 16 Identify questioned costs as required by §200.516 (a)(3 - 4). 17 See footnote 12. 18 To the extent practical, indicate when management does not agree with the finding, questioned cost, or both.

Maywood Melrose Park Broadview School District 89 06-016-0890-02 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ending June 30, 2022 SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 1. FINDING NUMBER:14 2022 - 003 2. THIS FINDING IS: X New Repeat from Prior year? Year originally reported? 3. Federal Program Name and Year: Elementary and Secondary School Emergency Relief (ESSER) Fund - PY 2022 4. Project No.: 22-4998-ER 5. CFDA No.: 84.425D 6. Passed Through: Illinois State Board of Education 7. Federal Agency: Department of Education 8. Criteria or specific requirement (including statutory, regulatory, or other citation) The District is required to effectively operate internal controls to ensure that expenditures claimed under the Education Stabilization Fund are for Activities Allowed under the award and that reimbursement for these costs are claimed within a reasonable period of time. 9. Condition15 Audit procedures identified that the District claimed $48,150 of expenditures related to equipment on their June 30, 2022 reimbursement claim submitted to the Illinois State Board of Education, however these expenditures were not received and paid by the District until July 2022. 10. Questioned Costs16 No reportable questioned costs were identified as the District did incur allowable costs in July/August of 2022 for equipment that were within the approved federal award agreement. 11. Context17 Based upon the review of total expenditures claimed under the federal award and the results of testing procedures performed this appears to be an isolated instance. 12. Effect The District did not incur the cost associated with the allowable cost claimed until July of 2022. 13. Cause The District's internal controls failed to detect that the expenditures claimed during a reimbursement request was not paid by the District. 14. Recommendation We recommend that the District perform a review of supporting documentation for expenditures claimed during a reimbursement request to ensure that expenditures claimed for reimbursement are for allowable costs that are within the approved federal award agreement and incurred within a reasonable period of time from the reimbursement request. 15. Management's response18 The District will implement an expenditure tracking system that will require all supporting documentation be uploaded to an electronic filing sharing system (OneDrive) for all quarterly reporting periods. The District will review submittals against dates for which goods and services were actually received. In addition, the District will implement a receiving protocol to coordinate payables against the receipt of materials. 14 See footnote 11. 15 Include facts that support the deficiency identified on the audit finding (?200.516 (b)(3)). 16 Identify questioned costs as required by ?200.516 (a)(3 - 4). 17 See footnote 12. 18 To the extent practical, indicate when management does not agree with the finding, questioned cost, or both.