Southeastern CUSD 337Local Government

Criteria or specific requirement: The Code of Federal Regulations (CFR) Title 2, part 180.220 states that non-Federal entities are prohibited from contracting with or making sub-awards under covered transactions to parties that are suspended or debarred. Condition: The District did not obtain debarment certification or document their vendor search in the System for Award Management website for vendors contracted in excess of $25,000 related to the grant program. Upon further review, it was determined that the vendors were not suspended or debarred. Questioned costs: None. Context: The District did not document their verification that selected vendors were not suspended or debarred. Effect: Noncompliance with the federal award program's suspension and debarment compliance requirements could occur and not be detected and corrected timely. Cause: Written procedures are not in place to verify if vendors contracted in excess of $25,000 related to the Child Nutrition Cluster program are not suspended, debarred, or otherwise excluded from doing business. Recommendation: Procedures need to be implemented to ensure all vendors contracted with have not been suspended or debarred or otherwise excluded from doing business, prior to procuring their services. Management's response: The District did verify vendors on the System of Award Management website, but lack written documentation. In the future, ISBE Form 85-34 will be completed in all future bid packets.

Criteria or Specific Requirement: Per 2 CFR 200.303 - Internal Controls and the OMB Complaince Supplement: Child Nutrition Cluster, Reporting - The District is required to have internal controls, including segregation of duties, over reporting of monthly reimbursement claims. Condition: The same individiual is responsible for preparing and submitting monthly reimbursement claims for the Child Nutrition Program without an independent review or approval before submission. Questioned Costs: The condition has resulted in no identified questioned costs. Context: Currently one individual is responsible for preparing and submitting the monthly reimbursement claims. Effect: Meal claims could be submitted to the Illinois State Board of Education that do not accurately reflect the number of meals served. Consequently, the District could be over- or under-reimbursed by this program. Cause: Abscense of formal internal control procedures resulted in one person performing all reporting functions. Recomendation: Implement segregation of duties by requiring one person to prepare the monthly claim and a second person (e.g., supervisor) to review and approve the claim before submission. The review should be suppported with signatures or electronic approval logs. Management's Reponse: A corrective action plan will be developed and implemented. A secondary review of the meal claim to the supporting documents will be performed before the meal claim is submitted.

Criteria or specific requirement: The Code of Federal Regulations (CFR) Title 2, part 180.220 states that non-Federal entities are prohibited from contracting with or making sub-awards under covered transactions to parties that are suspended or debarred. Condition: The District did not obtain debarment certification or document their vendor search in the System for Award Management website for vendors contracted in excess of $25,000 related to the grant program. Upon further review, it was determined that the vendors were not suspended or debarred. Questioned costs: None. Context: The District did not document their verification that selected vendors were not suspended or debarred. Effect: Noncompliance with the federal award program's suspension and debarment compliance requirements could occur and not be detected and corrected timely. Cause: Written procedures are not in place to verify if vendors contracted in excess of $25,000 related to the Child Nutrition Cluster program are not suspended, debarred, or otherwise excluded from doing business. Recommendation: Procedures need to be implemented to ensure all vendors contracted with have not been suspended or debarred or otherwise excluded from doing business, prior to procuring their services. Management's response: The District did verify vendors on the System of Award Management website, but lack written documentation. In the future, ISBE Form 85-34 will be completed in all future bid packets.

Southeastern CUSD No. 337 26-034-3370-26 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ending June 30, 2022 FINDING NUMBER: 2022-003 2. THIS FINDING IS: Repeat from Prior year Year originally reported? 2012 Federal Program Name and Year: All federal programs Project No.: Various 5. CFDA No.: Various Passed Through: Illinois State Board of Education Federal Agency: US Dept of Education, US Dept of Agriculture Criteria or specific requirement (including statutory, regulatory, or other citation) Reporting - Effective internal controls should be implemented to ensure that an adequate segregation of duties over the accounting function exists. Responsibilities for authorizing, approving, executing and recording transactions in the general ledger should be segregated between two or more individuals. Condition: Effective internal controls should be implemented to ensure that an adequate segregation of duties over the accounting function exists. Responsibilities for authorizing, approving, executing and recording transactions in the general ledger should be segregated between two or more individuals. Questioned Costs: None Context: One employee is responsible for most aspects of the cash receipts, cash disbursements and payroll functions. This individual is also responsible for recording these transactions in the general ledger and signing checks. Effect: This condition increases the possibility that errors or fraud may occur and not be detected on a timely basis. Cause: Due to the small size of the District and economic constraints, it is not practical to hire additional personnel to further segregate duties over the accounting functions. Duties have been assigned based on the experience and schedules of office personnel. Recommendation: When this condition exists, the Superintendent?s and Board of Education's close oversight and review of accounting information on a regular basis is the best means of preventing or detecting errors or fraud. We also recommend that all checks be reviewed and signed by the Superintendent rather than the bookkeeper. Management's response: Due to the small size of the District, it is not practical to hire additional personnel solely for the purpose of achieving an ideal segregation of duties over the accounting function. Some segregation of duties has occurred as an outside individual has been contracted to perform the monthly bank reconciliations. In addition, the Superintendent will review and sign all checks.

Southeastern CUSD No. 337 26-034-3370-26 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ending June 30, 2021 1. FINDING NUMBER:14 2021- 003 2. THIS FINDING IS: New x Repeat from Prior year? Year originally reported? 2012 3. Federal Program Name and Year: All federal programs 4. Project No.: 5. CFDA No.: 6. Passed Through: Illinois State Board of Education 7. Federal Agency: US Dept of Education, US Dept of Agriculture 8. Criteria or specific requirement (including statutory, regulatory, or other citation) Reporting - Effective internal controls should be implemented to ensure that an adequate segregation of duties over the accounting function exists. Responsibilities for authorizing, approving, executing and recording transactions in the general ledger should be segregated between two or more individuals. 9. Condition: Effective internal controls should be implemented to ensure that an adequate segregation of duties over the accounting function exists. Responsibilities for authorizing, approving, executing and recording transactions in the general ledger should be segregated between two or more individuals. 10. Questioned Costs: None 11. Context One employee is responsible for most aspects of the cash receipts, cash disbursements and payroll functions. This individual is also responsible for recording these transactions in the general ledger and signing checks. 12. Effect This condition increases the possibility that errors or fraud may occur and not be detected on a timely basis. 13. Cause Due to the small size of the District and economic constraints, it is not practical to hire additional personnel to further segregate duties over the accounting functions. Duties have been assigned based on the experience and schedules of office personnel. 14. Recommendation When this condition exists, the Superintendent?s and Board of Education's close oversight and review of accounting information on a regular basis is the best means of preventing or detecting errors or fraud. We also recommend that all checks be reviewed and signed by the Superintendent rather than the bookkeeper. 15. Management's response Due to the small size of the District, it is not practical to hire additional personnel solely for the purpose of achieving an ideal segregation of duties over the accounting function. Some segregation of duties has occurred as an outside individual has been contracted to perform the monthly bank reconciliations. In addition, the Superintendent will review and sign all checks.