Addison School District No. 4Local Government

Condition: During audit fieldwork, our testing resulted in a restatement of fund balance in order to correct GASB 87 leases and personal property replacement tax revenue that was improperly recorded in prior years. Criteria: A good system of internal controls would provide for accurate recording and reporting of GASB 87 leases and personal property replacement tax revenue on a regular basis in order to provide for accurate financial reporting. Cause: Year-end entries related to GASB 87 leases and personal property replacement tax revenue were required in order to accurately present the District’s financial statements. Effect: A material adjustment to the District’s beginning fund balance was required to properly state GASB 87 leases and personal property replacement tax revenue. Recommendation: We recommend the District implement effective internal controls in order to provide an accurate assessment of reporting requirements. This implementation of improved controls would result in the appropriate recognition for financial reporting requirements. Corrective Action Plan: The District will implement internal controls to properly record GASB 87 leases and personal property replacement tax revenue on a timely basis prior to audit fieldwork.

Condition: During audit fieldwork, our testing resulted in significant audit adjustments in order to present materially accurate financial statements. Criteria: A good system of internal controls would provide for accurate representations of adjusted account balances for all District accounts prior to audit fieldwork. Cause: Year-end entries related to various accruals and other items were required in order to accurately present the District’s financial statements. Effect: The District’s financial statements were not fully adjusted prior to audit fieldwork. Recommendation: A vital process of effective internal controls is the review and subsequent adjustment of general ledger balances. This review and adjustment will aid in the appropriate budgeting and management of the District’s financial activities and resources. Corrective Action Plan: The Assistant Superintendent of Business, along with staff, will review year-end adjustments as part of the audit preparation process and work to reduce the number of entries proposed by the auditors and prepare fully adjusted financial statements prior to audit fieldwork.

Condition: The 2023 data collection form and audit package were not submitted timely. Criteria: As required by the Office of Management and Budget, auditees are required to submit a completed data collection form and audit package to the Federal Audit Clearinghouse on or before the earlier of 30 days after receipt of the auditor’s report or nine months after the end of the audit period. During 2023, this requirement due on March 31, 2024. Cause: The late filing is due to delays in the single audit process. Effect: The District is at risk of jeopardizing the continued funding provided by the federal agencies. Recommendation: We recommend the District implement policies and procedures related to the Uniform Guidance reporting requirements. Corrective Action Plan: The Assistant Superintendent of Business, along with staff, will review and evaluate the reporting requirements of all grants to ensure timely reporting requirements.

Bacon prevailing wage requirements. Criteria: As required by the Davis Bacon Act, auditees are required for any minor remodeling, renovation or construction contracts that are over $2,000 and use laborers and mechanics must meet prevailing wage requirements. Cause: The District does not have a process in place to track which contracts meet the Davis-Bacon prevailing wage requirements and ensure proper documentation is obtained. Effect: The District is at risk of jeopardizing the continued funding provided by the federal agencies. Recommendation: It is recommended that the District implement procedures to ensure documentation related to the use of federal funds are properly obtained, stored centrally and can be located timely. Corrective Action Plan: The Assistant Superintendent of Business, along with staff, will implement procedures to ensure documentation related to the use of federal funds are properly obtained, stored centrally and can be located timely.

Condition: The District could not provide documentation to attest there is any process or procedure in place to determine if a vendor is on the suspension and debarment list prior to utilizing services of a vendor. Criteria: As required by the Office of Management and Budget, auditees are required to have a procedure in place to determine if a vendor is on the suspension and debarment listing. Cause: The District does not have a procedure in place to track if a vendor is on the suspension and debarment listing. Effect: The District is at risk of using a vendor from the suspension and debarment listing. Recommendation: It is recommended that the District implement procedures to ensure vendors are not on the suspension and debarment listing. Corrective Action Plan: The Assistant Superintendent of Business, along with staff, will implement procedures to review new and existing vendors to ensure they are not on the suspension and debarment listing.

Condition: The District could not provide documentation to attest there is any system in place to track employees’ time spent on federal grants. Criteria: As required by the Office of Management and Budget, auditees are required to have a process in place to track employees’ time spent on all federal grants. Cause: The District does not have a system in place to track employees’ time. Effect: The District is at risk of jeopardizing the continued funding provided by the federal agencies. Recommendation: It is recommended that the District implement a process to track employees’ time spent on federal grants. Corrective Action Plan: The Assistant Superintendent of Business, along with staff, will implement a process to track employees’ time spent on federal grants.

Criteria or specific requirement: As required by the Office of Management and Budget, auditees are required to submit a completed data collection form and audit package to the Federal Audit Clearinghouse on or before the earlier of 30 days after receipt of the auditor's report or nine months after the end of the audit period. Condition: The 2022 data collection form and audit package were not submitted timely. Context: Due to extenuating circumstances related to personnel changes, the 2022 data collection form and audit package were unable to be submitted to the Federal Audit Clearinghouse in a timely manner. Questioned Costs: To be determined by grantor. Effect: The District is at risk of jeopardizing the continued funding provided by the federal agencies. Cause: The lack of meeting the applicable reporting requirements was largely due to issues created by extenuating circumstances related to personnel changes.

Criteria or specific requirement: As required by the Office of Management and Budget, auditees are required to submit a completed data collection form and audit package to the Federal Audit Clearinghouse on or before the earlier of 30 days after receipt of the auditor's report or nine months after the end of the audit period. During 2020, this requirement was extended by six months for audits due on March 31, 2021. Condition: The 2020 data collection form and audit package were not submitted timely. Context: Due to the COVID-19 pandemic and other extenuating circumstances, the 2020 data collection form and audit package were unable to be submitted to the Federal Audit Clearinghouse in a timely manner. Questioned Costs: To be determined by grantor. Effect: The District is at risk of jeopardizing the continued funding provided by the federal agencies. Cause: The lack of meeting the applicable reporting requirements was largely due to issues created by the COVID-19 pandemic and other extenuating circumstances.