Eureka CUD 140 School DistrictLocal Government

Criteria or Specific Requirement: The Small Purchase Procurement Method adopted by ISBE requires that public schools entering into a contract for perishable food items in excess of $10,000 but not more than $250,000 must solicit quotes or bids from a minimum of three qualified vendors. Condition: The District did not solicit quotes or bids for the purchase of milk products. Questioned Costs: None. Context: The District did not implement internal controls to solicit bids from qualifying vendors for the purchase of perishable food items. Effect: The District may pay prices in excess of fair amounts without soliciting multiple different quotes or bids. Cause: The District believed an exception to bidding requirements for contracts for the purchase of perishable foods in the Illinois School Code [105 ILCS 5/10-20.21(a)(iv)] exempted the District from solicitng more than one quote or bid for milk products. Recommendation: The District should solicit quotes or bids from qualifying vendors for milk purchases as required under the Small Purchase Procurement Method. Management's Response: There is no disagreement. The District will implement policies to solicit quotes or bids from qualifying vendors in future years. A contract had already been awarded for the 2024-25 school year before this defficiency was discovered, so this internal control will be implemented for the 2025-26 school year.

Criteria or specific requirement (including statutory, regulatory, or other citation): The Small Purchase Procurement Method adopted by ISBE requires that public schools entering into a contract for perishable food items in excess of $10,000 but not more than $250,000 must solicit quotes or bids from a minimum of three qualified vendors. Condition: The District did not solicit quotes or bids from qualified vendors for the purachse of milk products. Questioned costs: None. Context: The District did not implement internal controls to solicit bids from qualifying vendors for the purchase of perishable food items. Effect: The District may pay prices in excess of fair amounts without solicitng multiple different quotes or bids. Cause: The District believed an exception to bidding requirements for contracts for the purchase of perishable foods in the Illinois School Code [105 ILCS 5/10-20.21(a)(iv)] exempted the District from solicitng more than one quote or bid for milk products. Recommendation: The District should solicit quotes or bids from qualifying vendors for milk purchases as required under the Small Purchase Procurement Method. Management's Response: There is no disagreement. The District will implement policies to solicit quotes or bids from qualifying vendors in future years. A contract has already been awarded for the 2024-25 school year, so this internal control will be implemented for the 2025-26 school year.

1. FINDING NUMBER:2021- 001 2. THIS FINDING IS: new 3. Federal Program Name and Year: Child Nutrition Cluster - 2020 4. Project No.: 20 & 21-4210, 4220, 4225 5. CFDA No.: 10.553, 10.555, 10.559 6. Passed Through: ISBE 7. Federal Agency: U.S. Department of Agriculture 8. Criteria or specific requirement (including statutory, regulatory, or other citation) 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 disbarred. 9. Condition The District did not obtain debarment certification or check 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. 10. Questioned Costs None. 11. Context The District did not verify that selected vendors were not suspended or debarred. 12. Effect Noncompliance with the federal award program's suspension and debarment compliance requirements could occur and not be detected and corrected timely. 13. Cause 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. 14. 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. 15. Management's response There is no disagreement with this finding and procedures will 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.

1. FINDING NUMBER: 2021- 002 2. THIS FINDING IS: New 3. Federal Program Name and Year: Child Nutrition Cluster 2020 4. Project No.: 20 & 21-4210, 4220, 4225 5. CFDA No.: 10.553, 10.555, 10.559 6. Passed Through: ISBE 7. Federal Agency: U.S. Department of Agriculture 8. Criteria or specific requirement (including statutory, regulatory, or other citation) The Code of Federal Regulations (CFR) Title 7, part 210.14(b) states the school food authority shall limit its net cash resources to an amount that does not exceed 3 months average expenditures for its nonprofit school food service. 9. Condition The District has not adequately monitored the net cash resources of the child nutrition program. Upon further review, it was determined that the net cash resources of the nonprofit school food service did not exceed 3 months average expenditures. 10. Questioned Costs None. 11. Context The District did not calculate the net cash resources of the nonprofit school food service. 12. Effect Noncompliance with the federal award program's resource (cash) management requirements could occur and not be detected and corrected timely. 13. Cause Management had not developed a system of internal control to ensure compliance with the Cash Management compliance requirement. 14. Recommendation We recommend that the management establish internal controls related to the cash management compliance requirement to ensure that the net cash resources of the nonprofit school food service does not exceed 3 months average expenditures. 15. Management's response There is no disagreement with this finding and internal controls will be developed to monitor the net cash resources of the nonprofit school food service.