RICH TOWNSHIP HIGH SCHOOLS DISTRICT 227Local Government

Condition: During audit fieldwork, our testing resulted in a restatement of fund balance in order to correct leased capital assets, buildings, land improvements and equipment categories of capital assetsCondition: During audit fieldwork, our testing resulted in a restatement of fund balance in order to correct leased capital assets, buildings, land improvements and equipment categories of capital assets. Criteria: A good system of internal controls would provide for accurate recording and reporting of capital assets on a regular basis in order to provide for accurate financial reporting. Cause: Year-end entries related to capital assets 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 capital assets. 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 and Assistant Superintendent of Administrative Services will implement internal controls to properly record capital assets on a timely basis prior to audit fieldwork.

Federal Program Name and Year: COVID 19- Educational Stabilization Fund Project No.: 24-4998-E3 AL No.: 84.425U Passed Through: Illinois State Board of Education Federal Agency: United States Department of Education Criteria or specific requirement (including statutory, regulatory, or other citation): 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 federal award identification number), who holds title, the acquisition date, 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 sales price of the property (2 CFR section 200.313(d)(1)). Condition: The District did not maintain adequate property records to comply with 2 CFR section 200.313(d)(1). Questioned Costs: None Context: The District last updated its property records in 2021. Since 2021, the District has relied upon non-audit services from its accounting firm to assist with compiling capital asset values for external reporting. These non-audit services are not detailed enough to comply with Federal regulations because they are meant to satisfy Accounting Principles Generally Accepted in the United States of America. Effect: The District was out of compliance with Federal Equipment and Real Property Management regulations. Cause: The cause of the condition was a lack of a business office policy and procedure to ensure annual updating of property records, including the tagging and marking of items or Federal origin. Recommendation: It is recommended that the business office establish a policy and procedure to ensure annual updating of property records, including the tagging and marking of items of Federal origin. Management Response: See corrective action plan.

Federal Program Name and Year:Title I Grants to Local Educational Agencies; Project No.:23-4300-00; Assistance Listing no.: 84.010; Passed Through:Illinois State Board of Education; Federal Agency:United States Department of Education. Criteria or specific requirement (including statutory, regulatory, or other citation), Per the Illinois State Board of Education (ISBE) Electronic Expenditure Reporting System Quarterly user guide, quarterly expenditure reports are due 20 calendar days after the expenditure report date. Condition: The District submitted all quarterly expenditure reports late per ISBE requirements. Questioned Costs: None. Context: All quarterly expenditure reports submitted were late. Quarter one was due October 20, 2023 and submitted September 22, 2023. Quarters two and three were not submitted. Quarter four was due July 20, 2023, and submitted October 2, 2023. Effect: The District was out of compliance with its subgrantor/cognizant agency (ISBE) as a result of submitting the expenditure reports late. Cause: The cause of the condition was a lack of a procedure to ensure timely filings in the grant administration department. Recommendation: It is recommended that the District establish policies and procedures regarding timely grant expenditure report submissions and that these policies and procedure be trained on with staff and enforced to ensure compliance. Managements response: See corrective action plan.

Federal Program Name and Year: COVID 19 - Education Stabilization Fund; Project No.: 23-4998-E2; Assistance Listing no.: 84.425; Passed Through: Illinois State Board of Education; Federal Agency: United States Department of Education. Criteria or specific requirement (including statutory, regulatory, or other citation): 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 federal award identification number), who holds title, the acquisition date, 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 sales price of the property (2 CFR section 200.313(d)(1)). Condition: The District did not maintain adequate property records to comply with 2 CFR section 200.313(d)(1). Questioned Costs: None. Context: The District last updated its property records in 2021. Since 2021, the District has relied upon non-audit services from its accounting firm to assist with compiling capital asset values for external reporting. These non-audit services are not detailed enough to comply with Federal regulations because they are meant to satisfy Accounting Principles Generally Accepted in the United States of America. Effect: The District was out of compliance with Federal Equipment and Real Property Management regulations. Cause: The cause of the condition was a lack of a business office policy and procedure to ensure annual updating of property records, including the tagging and marking of items or Federal origin. Recommendation: It is recommended that the business office establish a policy and procedure to ensure annual updating of property records, including the tagging and marking of items of Federal origin. Management's response: See corrective action plan.

Rich Township High School District 227 07-016-2270-17 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ending June 30, 2019 SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 1. FINDING NUMBER:14 2019- 002 2. THIS FINDING IS: x New Repeat from Prior year? Year originally reported? 3. Federal Program Name and Year: Child Nutrition Cluster - 2019 4. Project No.: 19-4210-00, 19-4220-00 5. CFDA No.: 10.553, 10.555 6. Passed Through: Illinois State Board of Education 7. Federal Agency: United States Department of Agriculture 8. Criteria or specific requirement (including statutory, regulatory, or other citation) Children from households with incomes at or below 130 percent of the Federal poverty level are eligible to receive meals or milk free under the School Nutrition Programs. Children from households with incomes above 130 percent but at or below 185 percent of the Federal poverty level are eligible to receive reduced price meals. Persons from households with incomes exceeding 185 percent of the poverty level pay the full price (7 CFR sections 245.2, 245.3, and 245.6). 9. Condition15 One student was noted as ineligible based on income and listed as ineligible on the application. However, the student was receiving free meal benefits due to a clerical error. 10. Questioned Costs16 None noted. 11. Context17 In a sample of sixty children tested, one was noted as ineligible. The sample was not statistically valid. 12. Effect The effect of the condition is that ineligible students could be receiving benefits and that unallowable costs could be submitted for reimbursement. 13. Cause The cause was determined to be human error when entering the information into the Websmartt program. A review control failed to operate effectively and did not catch the error. 14. Recommendation It is recommended that the District implement strong review controls over the eligibility determination, and ensure their operating effectiveness. 15. Management's response18 The District moved to an automated meal application process. (My School Apps) This eliminates the human component in the benefit determination

Rich Township High School District 227 07-016-2270-17 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ending June 30, 2019 SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 1. FINDING NUMBER:14 2019- 003 2. THIS FINDING IS: New X Repeat from Prior year? Year originally reported? 2018 3. Federal Program Name and Year: All Federal Programs 4. Project No.: 5. CFDA No.: 6. Passed Through: 7. Federal Agency: 8. Criteria or specific requirement (including statutory, regulatory, or other citation) Uniform Grant Guidance requires the District to submit the Data Collection Form and single audit reporting package to the Federal Audit Clearinghouse (FAC) within the earlier of nine months following its fiscal year end, or 30 days after receipt of the auditors' report. 9. Condition15 The 2018 Data Collection Form was submitted/accepted by FAC more than 9 months after fiscal year end. 10. Questioned Costs16 N/A 11. Context17 The District failed to submit the Data Collection Form and single audit reporting package to the Federal Audit Clearinghouse within the earlier of nine months following its fiscal year end, or 30 days after receipt of the auditors' report. 12. Effect Late submission results in a criteria being met under which the District may not be considered a low-risk auditee. Further, the late submission may impact the availability of certain sources of federal revenues, including those passed through state and local agencies. 13. Cause Due to turnover in the Business Office, the data collection form and related single audit reporting package were prepared timely but not certified and submitted timely to the FAC. 14. Recommendation We recommend the District prepare and submit the data collection form and single audit reporting package timely. 15. Management's response18 The District will work with their external auditors to ensure the data collection form single audit reporting package is filed timely

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