KANKAKEE SCHOOL DISTRICT 111Local Government

KANKAKEE SCHOOL DISTRICT 111 32-046-1110-25 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ending June 30, 2025 SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 1. FINDING NUMBER:14 2025 - 002 2. THIS FINDING IS: X New Repeat from Prior year? Year originally reported? 3. Federal Program Name and Year: Child Nutrition Cluster 4. Project No.: 24-4210-00, 25-4210-00, 25-4299-00, 25-4299-00, 24-4220-00, 25-4220-00 5. AL No.: 10.553, 10.555 6. Passed Through: Illinois State Board of Education 7. Federal Agency: Department of Agriculture 8. Criteria or specific requirement (including statutory, regulatory, or other citation) The District is required to follow the methods of procurement outlined in 2 CFR 200.320, , 105 ILCS 5/10-20.21, and the District's procurement policy when purchasing goods or services with federal awards. Key requirements include documented procedures, full and open competition, cost and price analysis, conflict of interest policies, and adherence to specific purchasing thresholds (micro-purchase, simplified acquisitions, sealed bids, competitive proposals, or sole source). Specifically, when the aggregate dollar amount of the procurement transaction exceeds the simplified acquisition threshold (currently $35,000), formal methods of procurement are required. 9. Condition The District procured $885,950 of services from a food service vendor and did not follow the formal methods of procurement outlined in 2 CFR 200.320(b)(2), 105 ILCS 5/10-20.21, and their established procurement policy as they did not procure the services through a competitive request for proposal process. 10. Questioned Costs Since the expenditures related to the procurement are pooled in the School Food Service account, the questioned costs of $885,950 relate to all the projects under assistance listing numbers 10.553 and 10.555. Our sample was not statistically valid and consisted of two vendors with a total sampled vendor payments of $1,078,742. 11. Context During our audit procedures we were unable to obtain supporting documentation for demonstrating that the district followed the formal methods of procurement outlined in 2 CFR 200.320(b) for goods procured from one food service vendor during the year that exceeded the simplified acquisition threshold. 12. Effect Failure to comply with federal and state procurement standards results in noncompliance and may expose the District to overpayment for food service commodities and services, increase risk of misuse of funds, and reduced transparency and accountability in the procurement process. 13. Cause The District failed to follow their established procurement policy, including inadequate review controls, to ensure compliance with procurement requirements as outlined in (2 CFR 200.320 )and 105 ILCS 5/10-20.021. 14. Recommendation We recommend that the District follow the procedures for the procurement of goods that meet the procurement procedures as defined by (2 CFR 200.320), 105 ILCS 5/10-20.021, and their established procurement policy. The District should maintain documentation to show that they complied with these requirements. 15. Management's response See corrective action plan

Criteria: Reporting of payroll tax liabilities. Condition: The District did not reconcile the payroll tax liability accounts on a timely basis. Questioned Costs: Accuracy of the liabilities. Context: The payroll tax liabilities constitutes the basic underlying accounting records for the District's payroll taxes. Effect: The District has not reported the correct balance in the payroll tax liability accounts. Cause: The District has had a high amount of turnover in the business office over the past several years. Recommendation: The District should reconcile the payroll tax liability accounts to supporting documentation on a monthly basis. Management's Response: The District will assign the appropriate personnel to complete the reconciliations on a timely basis.

Criteria: As required by the Office of Management and Budget, auditees are required to submit a completed single audit to the Federal Audit Clearinghouse on or before the earlier of 30 days after the receipt of the auditor's report or nine months after the end of the audit period. Condition: The single audit report was not submitted timely. Questioned Costs: To be determined by grantor. Context: Due to delays in the audit process, the single audit was not filed timely. Effect: The District is at risk of jeopardizing the continued funding provided by the federal agencies. Cause: Delays in the audit process caused the late filing. Recommendation: We recommend the District implement policies and procedures related to the Uniform Guidance reporting requirements. Management's Response: The District will implement a process to track the submission time of the data collection form and package.

Federal Program Name: Education Stabilization Fund Federal Award Number: S425D210041, S425U210041 Federal Agency: US Department of Education CFDA No: 84.425D, 84.425U Passed Through: Illinois State Board of Education Pass-through ID Number: ESSER II 2021-4998-E2, ESSER III 2022-4998-E3 Criteria or specified requirement: Allowable Costs/Cost Principles: To be allowable grant expenditures, the expenditures must be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E. Journal entries related to grant expenditures should be reviewed for accuracy and verified as allowable grant expenditures. Condition: Expenditures were overclaimed on certain ESSER grants for fiscal year 2022 in the amount of $818,716. Questioned Costs: $636,025 was requested for reimbursement for the year ending June 30, 2022 for ISBE grant 2021-4998-E2, but was not actually spent during that time period. $180,691 was requested for reimbursement for the year ending June 30, 2022 under ISBE grant 2022-4998-E3, but the amount should have been reported on ISBE grant 2021-4998-E2. Context: Certain projects approved under the 2022 project year grants are still ongoing under the 2023 project year grants. Grant expenditure reports and future reimbursements may be able to be adjusted to correct the amounts overclaimed. Effect: The granting agency could disallow the expenditures and request the District to repay the funds. Cause: Journal entries to reclassify expenditures to grant lines on the general ledger contained errors. In one instance, certain expenditures ($603,789 ESSER II) were included twice in the total amount reclassified and the error was not detected. In a second instance ($32,236 ESSER II), the journal entry was posted from the information contained on the purchase order rather than the general ledger, and a portion of the amount had already been reclassified in a separate entry. In addition, $182,691 were charged to and claimed under the wrong grant subcode (expenditures were approved in the ESSER II grant budget but claimed under ESSER III). Recommendation: Journal entries should be reviewed for accuracy, and the District should review the general ledger detail prior to posting any entries to prevent duplicate entries from being posted. Also, the District should verify that all expenditures charged to grants are approved on the grant budget detail prior to requesting reimbursement. Management?s response: A corrective action plan has been prepared and is included in this report.

Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR Section 200.430(i)(1)(vii): Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: The District does not have a method for documenting time and effort for salaries charged both to a Federal award and state/local sources. Questioned Costs: None Context: An employee was charged 50% to Title I and 50% to local funds. The amount of salaries and related benefits charged to Title I was $42,693. Effect: The District is not in compliance with the Uniform Guidance related to time and effort documentation under allowable cost principles. Cause: The District was unaware of the specific requirements related to time and effort documentation for salaries charged both to a Federal award and state/local sources. Recommendation: The District should review the Uniform Guidance along with the applicable Compliance Supplement to determine which cost principles apply to each grant for time and effort documentation, and implement the appropriate procedures. Management Response: A corrective action plan has been prepared and is included in this report.

Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR Section 200.430(i)(1)(vii): Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee?s salary or wages amount specific activities or cost objectives if the employee works on more than one Federal award. Condition: The District does not have a method for documenting time and effort for salaries charged to more than one Federal award. Questioned Costs: None Context: An employee was charged 50% to Title II and 25% to Title I. The amount of salaries and related benefits charged to Title II was $23,761. Per inquiry of the employee, about 70% of her day is spent on Title II related activities. Effect: The District is not in compliance with the Uniform Guidance related to time and effort documentation under allowable cost principles. Cause: The District was unaware of the specific requirements related to time and effort documentation for this grant. Recommendation: The District should review the Uniform Guidance along with the applicable Compliance Supplement to determine which cost principles apply to each grant for time and effort documentation, and implement the appropriate procedures. Management Response: A corrective action plan has been prepared and is included in this report.

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